Multinational Growth and AP Challenges

Scale Your Back Office with Intelligent Automation to Support Growth

Today’s multi-national enterprises present unique challenges to accounts payable as a result of complex structures and the need to adhere to a broad set of compliance requirements. Multi-entity, multi-currency operations, that must comply with regional, national and international regulatory requirements present challenges for even the most operationally and technologically sophisticated organizations. Surprisingly, however, within many of these large, sophisticated and complex organizations, the same, common set of vendors feed and fuel their supply chain.

Ironically, what can often happen within an organization that continues to grow internationally, either through organic growth or through acquisition, is that even though the pool of vendors and suppliers remain the same, managing accounts payable processes in a way that maintains compliance with a growing range of regulatory and accounting requirements, becomes burdensome.

Let’s take a look at some of the implications, and how intelligent process automation can help alieve some operational overhead to create space for more effective oversite and strategic planning.

More growth = greater complexity

When a company expands into a new geographic market, it’s not uncommon to have a local subsidiary that conforms to the parent company’s accounting and consolidation standards. However, when a company decides to grow through acquisition into a new market (for example, purchasing a local distributor), they may inherit and be saddled with maintaining different legal entities operating within different accounting and regulatory systems.

As growth continues within that market or within other regions, things become exponentially complex. This can make it difficult to maintain a common supplier-based approach to accounts payable and create all sorts of procedural and compliance headaches accounting.

From an accounts payable perspective, there are many ways to tackle the complexities and compliance risks that can go hand in hand with business expansion. This includes:

• Implement a consolidated accounting process supported by a single ERP system. While ERP vendors often advocate this approach, it has all sorts of inherent limitations that make it practical as a viable, long term solution. Often, this is because multi-national organizations are rarely structured or operate in the same way, and a monolithic approach lacks the flexibility necessary to meet the unique needs of any one organization.
• Rely on a data warehouse to provide reporting ‘after the fact.’ This approach suffers from inherent inefficiencies and does not provide the level of responsiveness necessary for day to day running operation of an enterprise.
• Adopt a specialized platform to manage accounts payable, that can be integrated with one or more ERP systems.

The advantages of leveraging an accounts payable platform, integrated with an ERP/accounting system, includes:

• Manage payables across multiple entities and entity types
• Support common payment terms and conditions
• Standardize AP processes for timely, accurate reporting
• Automate approval workflows
• Segregate tax and regulatory compliance at the legal entity level

With these capabilities in place, AP automation can support operational efficiency along with ERP/accounting requirements to address compliance requirements.

In that context, intelligent process automation can free up corporate AP teams from manual tasks like document handling/sorting, data entry, approval follow-up and ERP transaction creation. Leveraging a system that can extract the appropriate data from vendor invoices, input it into one of more accounting systems that support and reflect the company’s structure, allowing time for process oversight, reporting and compliance, supports business growth while mitigating compliance risk.

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