Embedding Payments Into ERP Shifts Cash Control Back in-House

The reason for this was the humble, and all too frequently monolithic, enterprise resource planning system (ERP). These platforms recorded transactions, enforced controls and closed the books. They were not designed to move money but rather to explain and track where it had already gone.

Payments, by contrast, lived elsewhere, handled by banks, processors or FinTech vendors operating at the periphery of the ERP core. But a new generation of embedded B2B payment capabilities is transforming ERP platforms themselves from systems of record into systems of execution, allowing transactions to be initiated, approved and settled without leaving the system that recorded the obligation.

For chief financial officers (CFOs), this is evolution of the finance stack less about digitization than about reclaiming operational authority over cash movement, counterparty exposure and settlement timing. The architecture of corporate finance is compressing, and with it, the locus of control is shifting inward, turning what was historically an accounting framework into an execution environment.

Read more: The Classic ERP Model Is Dying. What Comes Next? 

Collapsing the Finance Stack to Solve for Fragmentation

For the last 15 years, enterprise finance technology typically followed a best-of-breed philosophy. Companies layered procure-to-pay tools, treasury workstations, payment hubs, fraud engines and reconciliation software around their ERP core. Each solved a specific problem, often in a silo, as well as adding integration overhead.

But as ERP providers integrate payment rails directly into their platforms, the distinction between financial workflow software and transaction execution software is fading. What once required five vendors can now occur within a single orchestrated environment. The value is not simply cost reduction but the elimination of latency and uncertainty between intent and settlement.

Findings in the report, “FinTechs Tap Embedded Payments to Deepen Customer Relationships,” a PYMNTS Intelligence and Marqeta collaboration, show that 90% of FinTechs offer embedded payments.

This convergence is being accelerated by artificial intelligence (AI)-driven orchestration. Machine learning models embedded in ERP environments can dynamically determine when to pay, how to route a transaction, which funding source to draw from and whether a counterparty presents heightened risk. The system can move from passively enforcing rules to actively optimizing outcomes across working capital, supplier health and liquidity posture.

Embedded payments also alter the relationship between procurement and treasury. Under the traditional model, procurement generated obligations that treasury later financed. The two functions were linked but sequential.

When payment capability is integrated into the procurement workflow, the distinction becomes less clear. Approval of a purchase order can immediately inform funding schedules, working capital allocation, and supplier settlement strategy. The financial consequence of a sourcing decision is visible at the moment it is made.

This integration permits more deliberate use of payment timing as a financial instrument. Companies can vary settlement terms dynamically, accelerate payments where discounts justify the cost of capital, or extend them within contractual bounds to preserve liquidity.

Still, firms can face frictions when attempting to modernize decades-old systems.

“We see challenges around legacy ERP systems with limited AR API capabilities,” Michael Younkie, vice president of product management at Billtrust, told PYMNTS in an interview last month. “We like to tie clear measurable KPIs to upfront things like DSO reduction, straight-through processing, digital invoice adoption.”

See also: CFOs Turn Fraud Control Into Margin Defense 

Data Integrity Becomes a Financial Concern

At the end of the day, digital compression of the finance stack via embedded payments can reduce reconciliation work but also increase reliance on the integrity of master data.

As ERP platforms assume responsibility for both recording and executing transactions, data quality moves from an IT issue to a balance-sheet concern. Erroneous vendor information or misclassified obligations can now propagate directly into payment execution without the buffering effect of intermediary systems.

CFOs must therefore treat data governance as an element of financial risk management, not merely administrative hygiene.

The cumulative effect of these developments is a subtle but important expansion of the CFO’s remit. Decisions about ERP architecture can now influence liquidity strategy, operational risk and even supplier relationships. Technology governance and financial governance are converging.

According to the PYMNTS Intelligence report “Time to Cash: A New Measure of Business Resilience,” published in October, 77.9% of CFOs see improving the cash flow cycle as “very or extremely important” to their strategy in the year ahead.

Finance leaders must therefore engage more directly with system design choices — how payment rules are configured, how data is validated, how resilience is ensured — because those decisions carry immediate financial consequences.

“The reality is that the world is moving way faster than most companies can keep up pace with,” Wendy Tapia, head of product, receivables at FIS, told PYMNTS in an interview posted Sept. 10. “Because of legacy systems, there are still a lot of organizations that are stuck in heavily manual processes, very fragmented systems. Without realizing it, they are limiting their agility and ability to scale.”

“When you have a unified cash view, now you have alignment with your procurement team, with the operations team, with treasury,” Tapia added. “Everyone is looking at the same cash reference. And when you have that level of clarity, your CFO can confidently start funding growth initiatives, whether that’s R&D, acquisitions, expansion.”