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3 Steps to Take Financial Shared Services to the Next Level

Monday, January 27, 2020

5 minute read

3 Steps to Take Financial Shared Services to the Next Level

Learn how financial shared services / shared service centres (FSSCs) can take the financial services they provide to their customers – internally or externally – to the next level and provides three steps to take that will help them get there.

 

If efficiency and cost-savings are the buzzwords of the noughties, collaboration, data, visibility and service are likely to be the words that organisations live by in the 2010s. But before this utopia is realised, things have to change.​

The dawn of a new decade: but are things really going to change?

The challenges facing SSCs in the first decade of the Millennium will not go away now that the round-numbered year of 2020 has begun…

There is still going to be pressure on organizations to constantly reduce costs. This is even more so the case when shared service centers (SSCs) are compared to external organizations (such as business process outsourcers, or BPOs) and there is still a looming risk that the function could be outsourced. At the same time, SSCs are still being forced to operate with multiple systems or systems that aren't state of the art in terms of automation. Additionally, though transparency is missing, the big questions being asked of heads of SSCs aren't.

In 2020 and beyond, leaders managing their group finances will still ask:

  • How is my SSC performing?

  • How do I improve and realise my targets?

  • How can I balance workloads in the best possible way?

  • How do I compare with others?

  • How do I know we are making progress?

But will they have the information they need to answer those questions? Perhaps, if they follow these three steps.

Using both old and new technology in a better way will be even more important

Even today, organisations are still struggling to answer these questions – and it’s not surprising. Never mind companies that suffer from data not being shared across multiple systems and ignore the companies who still rely on old technology. I am amazed that some companies still send and receive invoices by post when there are much better ways to do it!

Customers are putting more and more pressure on providers, so the answer is to leverage automation by offering innovative solutions, even if the data is not perfect.

It is not hard to get to a utopia that we should all be expecting this decade. These three steps – e-invoicing, optimal automation and transparency / visibility – are possible, with the right tools and partners.

1. Step 1: Do e-invoicing properly: get perfect invoice data without manual intervention 

Although e-invoicing is nothing really new (EDI-based e-invoicing has a long history) there is a difference between going through manual processes to turn invoices into e-invoices (using OCR technology, for example) and using data that is already being generated by a system in a native format which can be used when systems connect without trouble. Then the important question remains, "How do I onboard thousands of suppliers so they can all connect to the system?" At Basware we have programs to help our customers onboard their customers and we have the largest open invoicing and procurement network in the world – so joining a group that is already in use around the world (and one that is PEPPOL compliant) is easy.

2. Step 2: Automate as much as possible to reduce costs and cut cycle times

Many companies say they have automated - but there are often too many manual workflows required as part of this so-called automation. People still need to check, approve, and assign information while also validating data. Though this is sort of automation, it's not good enough.

With software like Basware’s accounts payable automation tools that includes functions like Order Matching, Match PlansSmart Coding, and Auto Routing, to name just a few, we help organisations turn semi-automated processes into highly automated processes.

This opens up opportunities for early payment, which can lead to early payment discounts and even Dynamic Discounting, which turns the cost center into a profit center- all based on highly automated processes! Humans are still involved, critical to business decision-making and to dealing with exceptions, but they are no longer data inputters. It is even possible to use technologies like artificial intelligence, for example, to ‘smart code’ invoices where there is no PO, using historical data (that is, to identify a given coding based on past treatment of similar invoices) to keep the process flowing.

3. Step 3: Use out-of-the-box transparency for continuous improvement and strategic decisions

When data flows between multiple systems, magical things happen. The most important thing being 100% visibility and transparency. Suddenly, it is possible to view a company's total spend including both PO-based and non-PO-based. With a three-way match between a purchase order, invoice, and goods receipt note (GRN), true 'touchless' order processing is also possible.

As a result so much more valuable data is now available to interrogate. Rather than traditional business intelligence solutions (which focus, for example, on spend reporting only) good data reporting gives this reporting plus a variety of process KPI´s – such as your automation rate, e-invoice rate, SSC reporting and much more.

When reporting is at the tips of your fingers then it is possible to use this information for continuous improvement – to set new goals and find new ways to work towards them, as well as looking at trends that can help improve strategic decision-making.

You know the first three steps, now take the next one:

These are just the first three steps to get 100% visibility of spend, build bridges between different business units based on common data – which can lead to improved collaboration – and take your FSSC to the next level.

To find out more, download the Basware and SSON report on How to Turn AP into a Value- and Profit-Engine. And when you’re ready to go to the next level, we can help you. Just get in touch.