Shared Financial Services

The idea of finance shared services isn’t novel, but improved technologies are creating a new way for them to reach maximum efficiency levels. Finance shared services started to become popular in the 1990s as businesses used them as a way to achieve economies of scale by centralising shared services. Such shared service centres (SSC) are well-designed to manage accounting processes in offshore locations or centralised away from disparate business units to lower costs.

About 80% of the Fortune 500 companies take part in a shared service model for one or many of their operations. Even so, SSCs haven’t yet reached absolute perfection, but with the aid of automation tools, they are continuously proving their value and saving businesses time and money.

What is Shared Services?

A shared service centre is a centralised location for shared services that happen within an organisation. The SSC can be responsible for handling specific tasks, such as accounting, human resources, payroll, IT, legal, security or purchasing, to name a few.

The SSC serves the business unit with its specialised service to cut overall costs and create a higher degree of strategic flexibility. Although it sounds similar to dividing an organisation by department, a shared service centre is different because it has measurable outputs and is in control of services for entire organisations. Their outcomes are both qualitatively and quantitatively assessed.

Many benefits of setting up a shared service centre, particularly in Finance, overlap with the benefits of financial automation tools. That’s why automation tools should be part of every financial shared service centre because both are meant to offer: reduced costs, centralised services, standardised processes, measurable outcomes and easy deployment.

Benefits of Shared Services

Many businesses have realised the benefit of using financial shared services because the workflow is similar between business units. Since financial processes adhere to compliance and regulations, it is something that can and should be standardised in its approach.

Furthermore, with the utilisation of automation tools, finance shared services can still deliver the impactful insights from deep data analytics that supports decision-making. These big business decisions often come from financial executives within the central business unit.

So, SSCs and automation tools support financial business leaders by offering a multitude of benefits, including:

Increased efficiency: Your business will be able to get the most out of investment in technology, have a retained sense of control and decrease labour costs.

Increased effectiveness: You will be able to leverage specialist skills, boost decision support, warehouse data efficiently, and improve the controlled environment.

Standardisation: Finance processes should be standardised across the board and with SSC and automation, you can strengthen your application management and set best practices. From managing data to reporting insights, each process will follow the same pre-defined path from beginning to end.

Control: You can rest assured knowing that there are oversight and management of SSC finance services and that the outcomes are all measurable with data and analytics. Your ROI is easily calculated by comparing previous data and industry benchmarks to your own KPIs.

Decreased costs: Instead of having big accounting departments across all of your organisations, the financial processes will take place in one centralised location with a dedicated team to oversee all aspects.