Back in the 1980’s businesses strived to implement decentralisation. It was a popular mantra espoused by the majority of business consultants at the time. However, by the early ‘90s it was apparent that decentralisation (at least in some contexts) missed many of the opportunities for economises of scale and standardised working practices.
From the early ‘90s, it became apparent that centralising financial processing, particularly across borders, achieved economies of scale with centralised control and greater visibility of such important processes. And the Financial Shared Service Centre (FSSC) was born.
Now over 60% of fortune 500 businesses have shared service structures and this continues to grow. Consolidation of processes requires standardisation, but this standardised approach can prove costly to reintegrate with the wider business where internal or cusomter-facing touch points exist. One such touch point is invoicing.
The paradigm of e-invoicing pairs well with that of the shared service centre, both offering significant efficiency gains and a more centralised, visible process. In particular, the function of e-invoicing can help take a singular, standardised invoicing feed from financial systems and create the rich variety of invoice formats and template-driven layouts required across the breadth of recipients.
FSSCs are typically international in character, supporting offices across the globe. This often means a multilingual workforce, and the requirement to share access to information in different languages. Centralising invoices electronically affords the necessary flexibility in access and control expected from an FSCC. Furthermore, in an electronic environment, discrete tiers of access can be established, allowing multiple user roles access to different groups of the same data – e.g. country or brand-specific invoicing data within a multi-brand group.
When first conceived, the focus of shared service centres (SSCs) was primarily to achieve economies of scale through the centralisation of (paper-based) transactional document creation and processing (of which invoices were a key component).
These days, the emphasis is on alignment of administrative processes and the potential for headcount reduction through process improvement initiatives. In some cases reductions in staff costs of upto 35% have been achieved. The reduction of print and paper invoicing supports this increase in efficiency further, enabling fewer credit control staff to achieve far more in the same time.
Financial Shared Service Centres are an important part of any global business’s drive for financial efficiency, and e-invoicing forms an essential component in their makeup. Without e-invoicing, an FSSC may be creating efficiencies in many areas and yet struggling to realise the impact of this due to the bottleneck in manual invoicing processes.