Understand Financial Shared Center Service in 10 Minutes
What is financial shared services?
Shared Service SSC (Financial Shared Service Center)
Shared Service Center centralises some of the repetitive transactional routine(basic and non-strategic work) carried out by each member unit of the group in a relatively independent business unit. The scope of shared services mainly includes: finance, human resources, legal affairs, information technology, supply chain management, customer service and training, etc.
Financial Shared Services FSSC
It delivers an integrated and independent service delivery platform for all financial and administrative functions in a group company, which is originally dispersed in various subsidiaries.
Sharing is a revolution
Sharing is a new management concept: To integrate businesses that can be shared as services and establish a service center, it allows as many business departments to share these services as possible to improve efficiency and reduce costs.
Sharing is a new organizational structure. Separate the non-core business of an organization from the original organization system and transfer it to a service department for unified operation. The decentralized cost center will be transformed into a profit-driven and gradually expanding to be a business unit. The subsidiaries only focused on core business or business with high competitiveness and high added-value. It helps downsize organisation.
Sharing is a management change: It is not only centralized, integrated and intensive, but also the result of changes in the corporate strategy, business strategy, organizational strategy, talent strategy, technology strategy, and business strategy.
Changes in financial organization and function deployment of group companies after sharing
Services that can be included in the shared service center
Contents to be shared: The mentioned 9 or more types of financial services can be included in the financial sharing center, which will be provided for all subsidiaries.
Characteristics of reforms after setting up SSC: Realization of zero cashier, zero accounting, zero books in subsidiaries.
Organizational attributes of SSC: The shared service center is an independent organization within the group, and the form of expression can be a department, a division, or an independent company of the group.
Changes in business after setting up the SSC: When all basic financial services are transferred to the financial sector, the processing organization has changed—from the original subsidiary’s financial staff for approval and processing to the sharing center’s financial staff for approval and processing.
Values brought by FSS Center
To satisfy the enterprise strategic development
The size of corporate financial organization and personnel need not be accompanied by unlimited expansion such as mergers and acquisitions
Efficiently complete the accounting and reporting of newly established companies to meet the rapid development needs of enterprises
Promote rapid business development
All subsidiaries do not need to be equipped with financial personnel for accounting and reporting, and need not worry about financial work. More resources can be allocated on business development
Any newly established subsidiary can be quickly supported by the FSSC as well
Reduce financial operating costs and improve efficiency
The financial shared service center (FSSC) adopts a specialized division of labor model to carry out financial work, which can greatly increase financial work efficiency and reduce a lot of finance manpower
To strengthen the group control capability and process standardization
By setting up a financial shared service center (FSSC), the financial accounting and reports of all the subsidiaries in the group are completed by the staff of the FSSC, which is directly under the headquarters, which is more conducive to group management
At the same time, it can promote standardisation
To promote the transformation and upgrade of financial management
By setting up a financial shared service center (FSSC), the working efficiency of financial staff would be greatly improved and a large number of financial staff would be liberated.
The financial staff can then carry out management accounting
ly of System requirements for the normal operation of the financial shared service center
1. Shared services have high requirements for the integration of operation and finance.
2. Since the business included in the financial sharing center is mainly the basic financial operation, the enterprise still needs a all-round financial management system.
3. After setting up the FSSC, all financial services are processed across regions. Therefore, it is required that all business units in the enterprise can remotely access the supply chain system or online billing system.
Therefore, a powerful online expense management system is required, which can perform all accounts receivable and payable, fixed assets, funds receipt and payment documents, and so on.
4. The sharing center needs to work across organisations, so it needs an independent working platform; and other specific system support.