ERP vs PMS: Building a dual-system strategy for compliance and control

In property management or occupier services, Purchase-to-Pay (P2P) isn’t just a back-office workflow. It’s one of the biggest control environments you have. Done well, it protects cash, improves budget discipline, and gives you a clean audit story. Done poorly, it becomes the place where cost creep, policy bypassing, and fraud quietly take root.

And here’s the uncomfortable truth many teams don’t want to hear: if your P2P process is being driven primarily from your Property Management System (PMS), you’re likely carrying unnecessary governance risk. LOIS fits into the P2P process as the lease accounting sub-ledger by handling lease-specific data and compliance, then feeding summarised entries into your ERP for financial controls and payment execution.

The best-practice model is clear and increasingly consistent across modern finance environments:

• Your Enterprise Resource Planning software (ERP) should own financial control and payment execution
• Your PMS should own property-level operations and lease intelligence, including IFRS 16

When those roles blur, organisations don’t just create inefficiency - they weaken compliance and expose themselves to control failure. By implementing a specific PMS support tool for your ERP, such as LOIS, you can un-blur the lines and maintain focus your ERP and PMS platforms for better data clarity.

System architecture that holds up under audit scrutiny

Managing properties is complex by nature. Organisations can have multi-entity structures, differing asset classes, varied budgets, and operational teams that require speed. The temptation to “just run everything from the PMS” is understandable.

But it’s not the safest or most scalable approach, and doesn't account for the complex flow of data between controls, systems, and payments that a dual-system allows.

Your ERP should be the system that:

• Owns the vendor master, chart of accounts, approval hierarchies, and non-lease finance data
• Controls requisition approvals and spend thresholds
• Performs invoice matching
• Executes payments
• Maintains the audit trail

In plain terms, the ERP should be where the money gets approved and moved.

On the other side of the coin, your PMS should remain the system that:

• Manages leases and property-level contractual detail
• Tracks lease events and key dates
• Supports operational budgeting and visibility
• Performs IFRS 16 calculations and generates lease journals

This is especially important for IFRS 16. Lease accounting is technical and event-driven. Property teams need a user-friendly system designed for lease lifecycle management. Finance teams need accurate outputs that reconcile cleanly into the general ledger.

That’s why the strongest model is for the PMS to act as a specialist sub-ledger, feeding summarised, controlled entries into your ERP.

What best-practice P2P looks like

In a well-designed setup, the P2P journey flows logically across both systems without compromising control.

A typical process might look like:

1. 1. A requisition is initiated in the ERP, using property context informed by the PMS
   2. Approvals are routed in the ERP, based on financial authority levels
   3. Purchase orders may be created with property detail in the PMS, but are controlled through ERP-approved vendor and coding rules
   4. Goods and services are recorded and confirmed within the controlled finance environment
   5. Invoices are matched through the ERP’s automated three-way matching logic
   6. Payments are executed by the ERP with bank-grade security and risk controls
   7. Monthly property and lease journals from the PMS feed into an ERP control account for structured reconciliation

This may sound rigorous, and it is. But that’s the point. You don’t want your most important spend controls sitting in a system designed primarily for operational property management.

When your ERP and PMS systems work in tandem, you get a smoother, more scalable operations and audit-ready outputs.

The real advantage of ERP-led P2P

When ERP is positioned as the financial control hub, the benefits go beyond process neatness. You get:

• Stronger governance: Approval hierarchies, vendor controls, and segregation of duties are enforced consistently across entity structures
• Automated discipline: Three-way matching, exception handling, and transaction logic reduce manual work while tightening compliance
• Better fraud protection: ERP environments typically support advanced controls around bank detail changes, supplier risk settings, and audit logging, which are critical protections in today’s threat landscape
• Scalability without chaos: Multi-entity and multi-currency environments are handled in one coherent control framework, rather than stitched together across property systems
• Sharper analytics: Enterprise-grade reporting enables you to see spend patterns, predict risk, and defend budgets more intelligently
  

In short: ERP turns P2P into a governed corporate function, rather than a fragmented operational habit.

Why a PMS still matters

This is not an argument against PMS. It’s an argument for using it correctly.

Property leaders still need rich, property-specific insight. Lease administrators need a practical system for managing complex contractual events. And IFRS 16 requires nuanced calculations that an ERP alone often isn’t designed to manage elegantly.

A strong PMS provides:

• Lease liability and ROU calculations
• Amortisation schedules
• Modification and reassessment logic
• Contract event tracking and alerts
• Property-level reporting that enables operational accountability

And when those outputs are summarised into the ERP via a control account, you get the best of both worlds:

• Operational accuracy without financial risk
• IFRS 16 compliance without ERP over-configuration
• Clear reconciliation lines that auditors actually trust

The risk of getting it wrong

If your PMS is effectively acting as your financial control centre, your business may be exposed to:

• Weaker approval discipline
• Inconsistent vendor governance
• Limited fraud prevention around payment processes
• Harder audit defence
• Muddier accountability between operations and finance

You might 'get away with it' for a while, but that’s not the same as being safe.

The cost of poor P2P design is rarely immediate, but when it hits, it’s loud. Budget blowouts, audit findings, and control failure are all negative outcomes you will have to explain to your board.

The bottom line

The most defensible model for property management is not a single-system fantasy. It’s a dual-system best practice with clean boundaries. Your ERP controls the money, and your PMS controls the property reality and IFRS 16 complexity.

Integration and control accounts keep everything reconciled and transparent. That’s how you scale confidently without losing governance.

If your P2P process is still being driven primarily from your PMS, or if your lease accounting process feels bolted on rather than controlled, now is the time to reassess your architecture.

If you want to reduce risk, tighten approvals, and make your property finance model board-ready, get in touch with our team of Chartered Accountants today to find out how LOIS can help.