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Briony Kempton, senior proposition manager, ONESOURCE Statutory Reporting, EMEA at Thomson Reuters discusses how with a shared service centre strategy, organisations can overcome statutory reporting challenges.

For multinational corporations, today’s business environment demands accurate statutory reporting right across the globe. Keeping up with ever-changing legislation in every country means finance teams have their hands full – constantly.

Business does not stand still either. As big businesses grow even larger, they must prioritise cost containment and seek organisational efficiencies to maximise profitability – the same is true of mid-sized firms as they become, or merge with, the behemoths of tomorrow. For finance teams this means reducing the preparation and review process of statutory reporting to hours instead of days. Having consistent data and automating repetitive tasks is key to gaining this efficiency, and can seem like a holy grail! Multinational organisations are also increasingly looking towards shared service centres to address statutory financial reporting on a global scale.

Managing business-critical statutory reporting processes from a shared service centre provides a means for improving the efficiency of a company’s operations and delivering an improved bottom line to the business. Consolidation of core business activities helps create a consistent process across the organisation that minimises risk and allows local finance teams to focus on the activities that add more value to the organisation.

However, managing statutory reporting across multiple jurisdictions is complex. There are a variety of challenges finance teams face such as handling source data from disparate ERP systems, standardising non-financial data that differs from country to country, and presenting that data in ways that will meet local regulatory requirements. Perhaps an obvious point, but one many will also struggle with is language barriers, as many regulations require reporting to be filed in the language of that jurisdiction.

Becoming lean and efficient

A shared service centre is a way to concentrate critical business processes into centralised units or groups with expertise and static processes instead of duplicating them in multiple business units that are spread across the globe. It aligns skills with job responsibilities in a way that helps companies to scale.

Executed well, this strategy improves cost efficiencies, service levels, and the overall responsiveness of the company. It can pay increasingly large dividends as a company continues to grow. Some of the departments most commonly associated with shared service centres are human resources, payroll, information technology, legal, compliance, purchasing, security and, increasingly, tax compliance and statutory financial reporting.

On top of cost reduction, shared service centres reduce risk and facilitate better management, such as by providing more detailed information about workflows and performance, that most companies internal departments produce.

Shared service centres positively impact multiple areas of finance:

  • Statutory financial reporting: Encourages standardisation of both process and deliverables. Historically statutory financial reporting has been a decentralised process. More and more organisations are looking to centralise and rely on technology to assist in streamlining the process.
  • Transfer pricing: Promotes the sharing of information about related-party transactions between in-house trade teams and customs and border protection, which has traditionally been a major source of manual effort.
  • Value-added/Indirect tax: Ensures compliance with the many jurisdictional rate changes that routinely affect a company’s tax liabilities.
  • Corporate tax: Helps tax close faster and with a lower risk of errors.

All departments involved can benefit from a shared service centre strategy. In a recent survey from Thomson Reuters and Shared Services Outsourcing Network, executives indicated their top reason for moving financial reporting and tax functions to shared service centres was to reduce costs. This was followed by improving consistency and control, and to standardise processes. Both of these factors directly improve how well financial reporting is managed at an operational level.

Driving Strategic Value

Shared service centres eliminate redundancies across large, multinational organisations and therefore, finance as a department is able to become leaner and more efficient. However, there are some barriers to this.

Firstly, regional teams that handle statutory reporting and the associated workflow may find it a challenge to adopt a centralised process while still maintaining local knowledge and relationships with the appropriate local authorities. Moreover, moving such work into a shared service centre is not something that just happens. It requires a significant organisational change to mission-critical activity, a challenge that must be managed in discrete steps.

Shared service centres and outsourcing are popular ways to centralise statutory financial reporting, both of which have benefits. An ideal candidate for a shared service centre will meet three basic criteria: 1) already has an up-to-date infrastructure; 2) wants to closely control the technology as well as the business processes in question, and; 3) relies heavily on the outcome of strong statutory financial reporting processes.

Organisations that meet these conditions tend to value the precise control over technology and processes that shared service centres offer. However, it is also not a one-or-the-other journey. Many companies opt to use local teams in countries where there is significant revenue at stake or risk. That way they can ensure that they have exacting control of the technology platform used to manage the statutory reporting processes. Some of these companies do so with the intention of eventually migrating into a shared service centre.

It is possible, sometimes even preferable, to use a shared service centre to, for example, handle financial reporting work in some regions or for certain business units and use outsourcing in others, giving companies greater flexibility. A company can then scale the shared service centre up as it builds up the skills, infrastructure, and processes internally.

While it’s hard to argue against the efficiencies that a shared service centre will deliver, migration to this new way of managing processes can be impeded by perceived costs. However, there are three responsibilities where finance departments can overlap in an operational sense, and recognising these could help to justify moving reporting workflows into such an environment:

  • The organisation needs to handle multiple jurisdictions simultaneously. Does the transition of statutory financial reporting into a shared service centre environment help it achieve compliance quicker and therefore reduce risk across multiple jurisdictions?
  • Regulators are constantly exerting pressure on MNCs. Will the transition better meet the needs of the evolving global regulatory environment?
  • The company needs processes that accommodate business growth. Can the transition help finance departments integrate and analyse new information on the business quickly and efficiently? Is it sufficiently scalable for statutory reporting if the company enters new markets?

Businesses need to objectively weigh both the upsides and downsides of migrating into a shared service centre. The requirements will vary from company to company, but centralisation and standardisation are two key areas where finance teams can help to achieve business growth globally, address regional regulators’ demands and leverage data that exists in and across the organisation.

Managing Multiple Jurisdictions

Because business is global, the best-performing departments will know how to assess what local jurisdictional rules mean for the company at a local and international level, in the context of the company’s short- and long-term business interests. To achieve this in reasonable timeframes without process friction, will mean using technology to collect, process, and manage data.

Local finance teams are being challenged to add more value and need to move away from manual tasks that fail to deliver adequate strategic value. These teams can become more nimble with the backing of a shared service centre to do their heavy lifting. They can then focus on understanding and communicating exactly how their specific jurisdictional rules for statutory reporting impacts the broader business.

And finally, finance processes are already managed out of shared service centres for many multinational corporations, so why not statutory reporting? If the management of the finance function resides principally inside a shared service centre environment, then placing other aligned functions there enables better communication and a closer cross-departmental working relationship.

Regulators – the global movement

Regulators are becoming savvier about how they use data and are developing a voracious appetite for new data sources. Crucially, they are also cooperating and collaborating with each other more closely than ever before.

This evolution is putting significant pressure on corporations to have sound compliance strategies at the ready. By using shared service centres, a company can standardise and provide speedy answers to anticipated regulatory questions with a high degree of confidence. While regulators will probably not require real-time responses to their questions in the immediate future, businesses generally obtain value from answering regulatory questions quickly so their people can move on to more strategic work.

Realtime Insight

It’s difficult to overstate the value that comes from being able to turn statutory reporting, and other financial data into real-time insight. Data analysis has transformed how the consumer sector sells, and it can make similar waves for how businesses are managed financially.

The departments that perform statutory reporting are a perfect place to leverage the potential of data analytics because they are massive consumers (and creators) of company data, right down to the last penny.

The ability to analyse trends in revenue, expense, and currency fluctuations in the context of different business strategies that a company is considering could reveal useful information on effective tax rates and cash positions – an insight many senior leaders value.


Businesses now create more data than ever, and they have the technical capability to store, access, and process that data into conclusions that are more dynamic, specific, and meaningful than ever before. Regulators, in turn, are increasingly obtaining this data and seeing to it that it is shared across other authorities.

Incorporating statutory reporting into the shared service centre environment is one more way for finance professionals to provide value to management. For those teams, the benefits of shared service centres are clear. They drive easier management of information from multiple jurisdictions, prepare teams for questions from regulators, and eventually leverage data analytics in ways that will identify efficiencies and improve the financial performance of a company.

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