Multi-entity businesses, accounts payable, and too many bank accounts

Margaret Nguyen3 minutes
Multi-entity businesses, accounts payable, and too many bank accounts
In this article

Businesses (should) make money via the sale of goods and services. Providing those goods and services takes money (e.g., accounts payable, or A/P). 

It’s difficult enough to handle business payments for one company with a few bank accounts. Multi-entity businesses (organizations with multiple subsidiaries, brands, divisions, and so on) literally multiply the problems of the A/P process. 

A few of the headaches include:

  • Broad categories of expenses that can vary wildly from one revenue model to another

  • Logging into multiple accounts, often based in different countries

  • Paying foreign A/P or invoices to international contractors

  • Keeping everything organized and reconciled in your ERP or accounting system

  • Seeing high exchange rates and fees on international payments

Different A/P solutions for multi-entity organizations

A common practice for complex businesses (with multiple brands and subsidiaries) is for one centralized finance team to handle the accounts payable process. Of course, this possibly leads to an “ivory tower” problem where certain teams feel the home office makes decisions that aren’t in the best interest of their particular division.

And real concerns do exist in a centralized system.

Example: A new fashion brand comes into the company. They’ve built a reputation for making quick moves with material suppliers and getting preferential treatment as a result.

Adding days or weeks to approve sizable material transactions, and then adding even more time for the money to clear into the supplier’s bank account means strained relationships, supply issues, angry team members, and (potentially) long-term performance issues.

[Related: 9 Actionable tips to set up your eCommerce financials for success]

Some complex businesses go decentralized

The opposite of a centralized A/P is to grant a certain level of autonomy to the different entities in the organization. This method works well when it’s essentially multiple separate businesses, each concentrated on fairly different operations, expenses, and models.

Example: A popular entertainment company has theme parks, media companies, as well as movie and television production companies. Each division is distinct, nuanced, and large.

While the example may be a bit too “on the nose,” you don’t have to be a conglomerate to have unique enough subsidiaries to warrant some flexibility in your A/P, possibly even a larger finance team.

[Related: Why capital matters for international expansion and how to get it]

There are pros and cons to both systems

In a centralized system, the company often has tighter control over the finances, a clearer forecast, and a better ability to plan for future moves (including adding more entities). On the other hand, centralized systems can stifle growth, especially if they slow down expense approvals and vendor payments.

Businesses acquired for their craftiness and ability to pivot lose their luster, bogged down by red tape.

The decentralized model, when done properly, often improves performance of individual portions of the company. But a poorly run decentralized system can result in bloated spending, a lack of cohesiveness with the overall company objectives, and (at worst) more opportunities for fraud.

Plus, there’s a real issue with the balance between the individual entity while also being part of the overall organization.

[Related: How to calculate and improve ROI in easy steps]

Middle ground via a supplementary solution

You may find yourself reading between a centralized and decentralized financial system thinking, “It sounds like we need neither and both at the same time.”

The benefits of a centralized solution means fewer bank accounts and a cleaner A/P system to keep tabs on. But decentralization requires multiple credit and bank accounts, often in a number of countries and currencies.

A real multi-entity solution requires the ability to condense the number of separate bank accounts into a single place (a.k.a. the ideal centralized solution). Likewise, your A/P system must have the ability to empower teams and divisions to make quick purchasing decisions, or receive fast approvals, to keep things running smoothly in all of the entities of a complex organization.

Some good news? Depending on the size, complexity, and international makeup of your organization, this is possible using a versatile global accounts solution, like Airwallex

[Related: Managing foreign exchange risk in times of high volatility]

Declutter A/P and empower your entire organization

The ideal blend between one accounts payable system for all entities and multiple subsidiaries running their own expense management programs comes down to three broad areas — cost, fluidity, and tracking.


The amount spent on fees and exchange rates has the potential to become a serious expense item of its own. If you’re a multinational multi-entity company, sending large payments at the best rate and lowest fees is a worthy endeavor. 

Some things to consider include low rate guarantees, whether fees change with transaction volume, and how quickly transfers complete. All of these impact both the bottom line and vendor relationships.


Speed benefits both centralized and decentralized A/P. 

For example, the need to log in to (at least) one account per entity severely slows down a small team or single person handling all outgoing funds. This slow down in turn strains creativity, productivity, and those vendor relationships. 

A solution that allows all entity expenses (both domestic and international) to run through a single account speeds up all subsidiaries while maintaining a centralized level of control.


Your business needs the ability to bring all multi-entity transactions to a single place, without losing the speed of decision-making. 

One solution is to issue digital multi-currency cards to key members of your team at each entity. 

For instance, if you have a team working on an event in Latin America, set a budget and issue an Airwallex Borderless Card in the local currency of the country. All those expenses will tie to that specific card, allowing for detailed tracking without stifling the need to lock in good rates and make quick decisions “on the ground.”

[Related: 15 Signs you should switch to an online business account]

Airwallex allows the best of both worlds — globally

Airwallex offers a number of solutions benefiting multi-entity companies. Get the best available exchange rates and issue digital cards to empower your individual teams while maintaining transparency. 

The biggest benefit? 

Your organization tracks all expenses (regardless of the number of entities) on a single platform. Teams upload receipts for faster approval. You’ll reconcile much more quickly than using multiple logins. Plus, you get real-time visibility into spending across all of your ongoing operations.

Give your team the flexibility of a decentralized expense management system while attaining a better grasp on accounts payable. Sign up today.

Back to blog


Margaret Nguyen

Subscribe for our latest news and updates

Related Posts

Payment gateways: What are they and how do they work?

Payment gateways: What are they and how do they work?

10 minutes

Why Are So Many Businesses Monetizing Embedded Finance?

Why Are So Many Businesses Monetizing Embedded Finance?

3 mins

What Airwallex heard at Stripe Sessions 2024 and our reflections

4 min