What ERP data means for commercial banks: where it comes from, how it differs from the data banks already hold, and how banks can access it.
The term ERP data comes up in vendor conversations, product strategy discussions, and questions about what client information a bank is missing, often without anyone pausing to properly define it. This guide covers what an ERP system is, the core financial modules inside one, what they reveal about a business, and how ERP data compares to the transaction data banks already hold.
What is ERP data and where does it come from?
ERP data is the financial record generated from a business’s Enterprise Resource Planning (ERP) system. An ERP typically covers a range of business operations, including inventory, HR, and supply chain, but at its core is the accounting system. That core holds the business’s financial records: the bills it owes suppliers, the invoices it has issued to customers, its general ledger, its cash position, and often its balances at other banks.
What’s the difference between an ERP and an accounting system?
An ERP and an accounting system differ in scope, although the terms are often used interchangeably. An accounting system handles a business’s book, such as bills, invoices, the ledger, and financial reporting. An ERP includes all of that, plus modules for running the rest of the business, such as inventory, HR, payroll, supply chain, purchasing, etc.
The key distinction: every ERP contains an accounting system at its core, but not every accounting system is an ERP.
Which one a business uses mostly depends on their size. A small business tends to handle its finances in an accounting system like QuickBooks or Xero, and manages everything else separately. As it scales, coordinating inventory, purchasing, and finance across disconnected tools stops working, and it moves to an ERP system like NetSuite, Sage Intacct, or SAP to run all of them in one place.
What categories of financial data does an ERP hold?
An ERP organizes a business’s financial records into a handful of core accounting modules. What sits beyond that (inventory, payroll, full supply chain management) varies considerably by platform and business, so what follows isn’t an exhaustive map. Instead, it covers what’s common to nearly every system.
A banker will recognize some of these names, usually from the reports and exports they generate rather than the modules directly. Here’s what each one contains, and how it maps to what a banker typically receives.
1. General ledger
The general ledger (GL) is the master record every other accounting report is built from. It contains every financial transaction the business has recorded, categorized into a chart of accounts: revenue, cost of goods, payroll, rent, and so on.
Finance teams use the general ledger to run month-end and year-end close. They do this by reconciling subledgers to the GL, reviewing trial balances, and posting closing entries. When a business has multiple subsidiaries or business units, the GL is also where those separate books get consolidated into a single set of financials for the parent company.
While a business will keep a separate set of books for each subsidiary, their ERP system will typically automate much of the consolidation required, like flagging and eliminating intercompany transactions, applying consolidation rules that map each entity’s chart of accounts to a common group-level structure, and auto-translating foreign currency balances into one reporting currency
When a client submits a P&L or balance sheet to their bank, alongside a loan application or at annual review, those reports were generated from the general ledger at a point in time, and that point may already be months in the past. The ledger itself has kept moving since. It reflects the business as of this week: the current cash position and what’s tied up in receivables, inventory, and debt.
2. Accounts payable
The accounts payable (AP) ledger is the live record of everything the business owes. It holds every bill received, the full supplier list, and every payment made. Open up a single bill and the detail gets more granular: the supplier’s name, the amount owed, the payment terms (net 30, net 60), the due date, how it was paid (check, ACH, wire, card), and the date it was actually paid.
Payments themselves usually go out in batches rather than one at a time, with finance teams grouping bills by due date, early payment discounts, or simply how much cash is on hand that week. The ledger also tracks aging: what’s due now versus what’s 30, 60, or 90 days out, which is what a finance team watches to manage supplier relationships and working capital. Periodically, that data gets reconciled against supplier statements, and at year-end it feeds 1099 reporting for contractors.
The ‘AP file’ a bank’s spend team might receive as part of a commercial card conversation is similar to this ledger, although it’s often much more limited. It’s also a snapshot frozen at the moment someone generated it. The ledger itself is updated every time there’s a change in a business’s AP operations.
3. Accounts receivable
The accounts receivable (AR) ledger is the income side: every invoice the business has issued, to which customer, for how much, when it was due, and when it was actually paid.
Invoices are typically generated straight out of the ERP, often tied to a sales order or contract, and payments get applied against the correct open invoice as cash comes in. When an invoice is deemed genuinely uncollectible, it gets written off rather than sitting in aging forever, and most businesses carry a bad debt reserve sized to their historical write-off pattern. Some businesses also offer a discount for paying early, like 2% off if the invoice is settled within 10 days instead of the full 30. All of this information can be found in the business’s AR ledger, and can offer greater insight into a client’s actual cash position.
When a client applies for a working capital line or invoice financing, the aged receivables report they submit is generated from this ledger. It typically covers every unpaid invoice grouped in 30-day bands by how overdue it is, alongside the average time customers take to pay (DSO).
That report is a snapshot, pulled at a single point in time. The ledger behind it keeps moving daily, and it holds detail the report never surfaces, like which customers habitually pay late, how concentrated revenue is in a handful of buyers, whether the bad debt reserve is climbing, and how much of that DSO number is really just early payment discounts doing the work rather than genuinely faster collections. A bank working from the periodic report sees the trend. A bank working from the ledger sees what’s driving it. Much of this additional information can be missing from the aging report a bank typically sees.
4. Bank accounts and cash
This module holds the business’s cash balances and connects out to its actual bank accounts. Finance teams use it to match transactions against the general ledger: incoming receipts, outgoing payments, transfers between accounts, all confirmed against what actually cleared. It’s also where short-term cash forecasting happens, pulling together AP due dates, expected AR collections, and current balances to answer questions like, what’s available next week or next month? Businesses with several banking relationships also use it to track transfers between accounts, including intercompany sweeps if there’s more than one entity.
A bank only sees its own piece of this. It has visibility into whatever accounts the business holds there, the balances, transaction history, maybe overdraft usage, but nothing beyond that. That’s a problem when a bank is trying to work out its share of wallet, or whether it’s actually the client’s primary operating bank. That question can be answered by looking at the client’s bank accounts and cash module in their ERP system. It captures every account, every institution, every balance, as the business’s own bookkeeping sees it.
The table below summarizes the modules covered in this section, what each one holds, and what that data reveals about how the business is actually performing.
| Module | What it contains | What it tells you |
| General ledger | Every transaction, categorized into a chart of accounts; the source of the P&L and balance sheet. | Whether the business is actually healthy right now: real revenue, real margins, and where either is quietly improving or deteriorating between reporting periods. |
| Accounts payable | Every bill received, the full supplier list, payment terms, and every payment made. | How the business manages its cash and obligations: whether it’s paying comfortably or stretching its suppliers, how dependent it is on key suppliers, and how much spend could move to alternative payment methods. |
| Accounts receivable | Every invoice issued, to which customer, with due dates and actual payment dates. | The quality and reliability of the business’s income: how long cash takes to arrive, whether that’s getting slower, and how exposed revenue is to a handful of customers. |
| Bank accounts and cash | Cash balances and transactions across every institution the business banks with. | The business’s total liquidity, where deposits actually sit, and which bank holds the primary relationship. |
How is ERP data different from bank transaction data?
A bank’s own transaction data records settlement events like every payment cleared through that bank, every deposit transferred, or every time a bank balance changes. Each record shows an amount, a date, and a counterparty name, but no context about the activity or intent behind it.
ERP data records the same events with their context attached, plus everything that happened before the money moved.
Take for instance a cleared $40,000 payment. The bank just sees the transaction. In the business’s ERP, it’s linked to a specific bill from a specific supplier, logged weeks earlier, with net 60 terms attached, paid 9 days past due.
Neither data source replaces the other. The bank transaction data is the verified fact that money moved. The ERP data is the context around it, such as the terms, the timing, the pattern, that turns that fact into something a banker can act on.
The differences between ERP data and bank transaction data also extend to coverage. A bank only sees activity that touches accounts held at that bank. The ERP records the business’s entire financial life, including payments made from other accounts, balances held at other institutions, and obligations that haven’t produced a payment yet at all.
Here’s a summary of the main differences between ERP data and bank transaction data.
| Bank transaction data | ERP data | |
| What it records | Settlement events: a payment cleared, a deposit transferred, a balance updated. | The full financial activity behind those events: bills, invoices, terms, ledger entries. |
| When it’s recorded | When money moves through the bank’s own accounts. | When the event happens in the business: a bill logged the day it arrives, an invoice the day it’s issued, often weeks before money actually moves. |
| Level of detail | Amount, date, counterparty name. | Amount, counterparty, payment terms, due date vs. actual payment date, payment method, currency, category of spend. |
| Coverage | Only activity touching accounts held at that bank. | The business’s entire financial life, including payments from other accounts, balances at other institutions, and debt with other lenders. |
| Forward visibility | None: a transaction only exists once it has happened. | Obligations that haven’t produced a payment yet: bills coming due, invoices outstanding, committed terms. |
| Verification | Immutable. | Business-maintained records. |
| What it’s best for | Confirming what happened. | Understanding why it happened and what the business needs next. |
How do banks access ERP data?
A business can connects their ERP system to their bank through the same secure OAuth flow they likely already use to grant access to an accountant or another software tool. Once permission is granted, the data can be retrieved on an ongoing basis rather than as a one-time export.
However, actually connecting to the client’s ERP is harder than it sounds, because there’s no single way in. Every ERP system has its own API, its own authentication, and its own security requirements. It requires separate builds to each one and then keeping every connection working as the ERP systems update their platforms.
Additionally, every ERP system structures the same information differently. NetSuite, and SAP, for example, represent a customer record, a bill, or a payment term in their own way, so everything has to be standardized into a consistent format before a bank can draw insights from the data of analyze trends across clients.
Many banks choose to partner with Codat to handle both the connections and the standardization, rather than building it all themselves.
Put ERP data to work at your bank
There’s a gap between what a bank sees and what a client’s finances actually show. ERP data is what closes it.
It shows how a business is really performing, how it manages cash and obligations, how reliable its income is, and where its deposits sit. That’s a much fuller picture than bank data alone can offer.
If you’re exploring how more data could support your bank’s goals, speak to one of our data experts by filling out the form below.