Last week Sovos Compliance was a sponsor at the ESSX conference in Warsaw, which focused on shared service centre settings (SSC) in the Central Eastern Europe (CEE). Whilst for many the region is almost a mature area for Centres of Excellence, many multinationals still see significant benefits to keeping or setting up more SSC’s in CEE.
VAT compliance has seen a significant increase in these SSC’s as another financial process that has benefitted from centralisation. The ESSX conference focused on the best practices that can help improve the traditional set-up with a heavy focus on emerging technology. We were pleased to find out that our solutions fit the forefront of emerging technology in SSCs and this is what we learned:
- Shift to process improvement
Although many SSCs are set up to focus on process execution due to outdated and inflexible work flow set up’s, the SSC of the future invests to make process improvement the prime focus.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 also takes 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.
- Talent
While top talent is still one of the best ways to ensure that SSCs act as the effectiveness 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 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. - 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 even 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. - 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 given for the overall group. Industry leaders have identified that outdated practices and “we’ve always done it this way” mentalities are 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.
See also our smart brief about VAT in SSC’s
- Act now!
Many SSC’s 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 implementing suitable technology are plentiful: correcting accounting inputs in the SSC first or waiting until the yearlong 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.
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