Last week, Sovos Compliance was a sponsor at the SSOW conference in Dublin, which focused on shared service centre settings (SSC) across Europe. As Eastern European shared services centres are still experiencing significant growth, organisations are closely watching the development of processes and technologies that are enabling their SSCs to become true Centres of Excellence.
VAT compliance has seen a drastic shift towards centralization using SSCs, as the business case demonstrates clear financial benefits as well as a more accurate and streamlined process when software is being used. The conference focused on the best practices that can help improve the traditional set-up with a heavy focus on emerging technology. Here are some of the key take-aways:
1. Shift to Focus on Process Improvement Rather than Just Process Execution
Although many SSCs are set up to focus on process execution due to outdated and inflexible work flow set up’s, the SSC of the future should be designed to make process improvement the prime focus. Continuous improvement has enabled SSC employees to embrace change and adapt to finance and/or organisational transformations quickly. These improvements are achieved while management now has the ability to take the time to focus on the overall strategy to align departments and communication within. Naturally, the smoother the process is running, the more time can be created to focus on higher level work and achieve efficiency.
While top talent is still one of the best ways to ensure that SSCs act as the effectiven centres of the organisation, being dependent on individuals can become a major hurdle if those employees move on to other opportunities. Moving away from such a dependency by using VAT technology solutions enables new team members to adjust quickly and hit the ground running without having to learn the ropes of individually set-up processes. Automation also eliminates the need to have highly trained personnel doing basic tasks and thus they can concentrate on process improvement.
3. Technology Should Enable You, Not Tie You Down
Even though ERP implementations take up significant amounts of time and resources, other process improvement technology should not be an additional hurdle. When implementing new automation software, work should not be impacted in a way that does not allow for usual execution or become a barrier to carry out tasks. Similar scenarios include disruptions due to updates, external parties needed for maintenance and incompatibility with current systems. Automation for an SSC should be mapped specifically for your organisation, cause minimal disruption and update regularly in the background.
4. Growing Movements of VAT Being Organised in SSC’s
It is a widespread perception that local knowledge is the most efficient way to handle local VAT requirements, but it also makes this information much more difficult to reconcile given that the data is pulled from the local system and therefore might not be an accurate representation for the overall group. Industry leaders have identified this as an outdated practice and the ‘we’ve always done it this way’ mentalities hinder real progress given the rapidly changing and complex nature of VAT obligations. Technology plays a significant role in helping make the transition to a centralised VAT process.
We also invite you to download our complimentary smart brief about
the benefits of VAT automation in SSCs, especially European shared services.
5. Act Now! The Future of European Shared Services
Many SSCs are a world away from the centres of excellence they were once set up to be. Stagnation is a common problem that hinders both effectiveness and efficiency due to the continued application of the same flawed process. Reasons to wait before implementing suitable technology are plentiful such as correcting accounting inputs in the SSC first or waiting until the year-long ERP implementation has been completed. Smart SaaS tools are not dependent on perfect processes, but help to support and improve, so human errors and limited capabilities can be overcome.
To learn more about how our solutions can help you automate and centralize your VAT determination, analysis and filing, contact us today.
Sign up for our exclusive VAT community today. As a member, Sovos offers a complimentary monthly newsletter to keep you up-to-date with any regulatory VAT changes in the European Union and beyond, as well as relevant articles around VAT compliance and automation.