Shared Services Centres challenges and how to avoid them

Many companies today have a strong focus on improving cost efficiency. The goal is to streamline the core business to achieve higher margins. Companies also review internal support functions to reduce the workload and cut costs. It is a natural step in a company’s development and often takes the form of outsourcing support functions to a Shared Services Centre (SSC). An SSC is a joint management unit for the finance and administration of multiple operations.

The SSC’s primary task is to streamline internal administration and standardise and enhance the quality of functions and processes. An SSC usually handles support functions such as financial administration, IT and human resources.

The first and most obvious benefit companies gain by establishing an SSC is indeed cost efficiency. This is followed by increased control and quality of the core business, which can lead to national and international expansion.

Many companies run into challenges in their efforts to improve efficiency by outsourcing to an SSC. Below, I describe four common challenges.

1. Multiple routines and file formats

If the business has companies registered in multiple countries, an SSC often has to use different service providers in each country (for example, scanning, banks, e-invoicing portals, ERP systems) because most providers cannot offer a global service. One effect of various service providers is that staff at the SSC face different routines of different companies. This happens, for example, with supplier payments or invoicing which require different formats depending on the ERP system or country in question.

2. Varying regulatory requirements and standards

More and more countries worldwide are introducing legal requirements regarding e-invoicing. The formulation of these legal requirements differs by country and the e-invoicing process is also subject to different local regulations. For a company which processes e-invoices in several countries, it is difficult to find a single solution for the entire e-invoicing flow. In regard to payment files, there are also standards to comply with, such as SEPA, which entered into force at the end of 2016.

3. Difficult to attain an overview

The fact that companies in the SSC use different ERP systems makes it difficult to attain an overview of consolidated statistics. The company is often forced to bring in an external system to compile data and generate reports.

4. Inadequate data acquisition systems

Many companies make use of a scanning service to gather information. This requires significant resources in terms of time and personnel to generate the quality desired. Incoming invoices are often manually scanned and much time is spent on getting the scanner to recognise various templates. Despite the time-consuming work, it is only possible to gather information at header level and not at line level. In doing so, the company misses out on valuable information for further analysis and decision support, such as cost analysis.

Pagero offers solutions to combat the challenges companies face when outsourcing to SSCs. Our services simplify finance and administrative work to optimise SSC processes, turning cost efficiency into a reality for business groups around the world. Services include: