Financial Shared Service Centre
The Financial Shared Service Centre or FSSC has become very popular as an essential support of many businesses. The size and type of the business does not matter. An ACCA Research Report1 lists more than forty organisations which had already established FSSCs in the early 2000s. By the type of client successfully served by Strategic Accounting Solutions, it is also clear that any type of business can benefit from a FSSC, although they specialise in providing a service to SMMEs and medium enterprises.
The Place of Shared Services in a Business
Every company has its core business, and support systems to keep the business running. Its core business represents the heart of the organisation. This can be identified by looking at the specific outputs of a company.
Supports of the Core Business
Support services are required in order for the core business to function effectively. The three most important reasons why support services exist are:
- Legal and governance requirements: Accounting, auditing and financial reporting in some form or other are legal requirements in every country. Corporate governance has become a major issue in recent times.
- Administration: There needs to be some order through admin procedures or else a business falls into chaos.
- Informational requirements: Businesses can’t run without information on transactions and clients.
Along with shared services in Human Resources (HR) and Information Technology (IT), a FSSC can provide the greatest benefit for a company in these areas.
Benefits of Using a FSSC
Economic and Financial Benefits
Most organisations are under increased pressure to be more profitable. The following benefits can be derived from a FSSC:
- Improved cost structures and savings
- Improved cash-flow.
- Improved logistics
- Improved coordination of support processes
Improved Business Focus
Most people want to be occupied with their core business. A widget maker wants to make widgets. They don’t want to “waste their time” in admin and paperwork. People often complain that this necessity takes their focus away from their core business. Yet not paying attention to these aspects can have disastrous consequences. Having a FSSC can free up an organisation to focus on their core business.
One of the reasons why people have difficulty in dealing with issues of financial management is because they seldom have any training in managing their finances and accounts. A FSSC, as provided by Strategic Accounting Solutions, unburdens a company of the need to spend the more time than necessary to get it right.
Online Real-time Information
One of the reasons why FSSCs have become so effective is due to developments in IT connectivity. The speed with which information can thus be processed via the cloud has increased radically. This has given companies who use a FSSC a great advantage because not only can it improve cash-flow, it can also improve customer service.
Wide Area Focus and Accessibility
A FSSC can serve a geographically dispersed organisation. Business type also does not matter. There are many varied examples which include large industrial companies, academic institutions and service organisations which make use of FSSCs.
With cloud services as developed as they are now, it is possible for a sole proprietor to make use of a FSSC at any location. This enables her/him to provide a speedy service to clients.
Centre of Excellence
A centre of excellence or COE typically provides advantages in standardisation, quality, efficiency, transparency and legal compliance. A FSSC can act as a COE which deals with contemporary accounting and finance issues. It can ensure the implementation and application of best practices in financial matters such as:
- Accounting: The daily, monthly and annual requirements of accounting, e.g. the preparation of management accounts, annual reports and debtors and creditor reconciliations, can be handled. A FSSC can ensure compliance with Workmen’s compensation, VAT returns, UIF, PAYE, and Pension contributions. Assistance can be rendered in matters related to CIPC registration and amendments.
- Taxation: A FSSC can provide tax consultation and liaison with Revenue services like SARS.
- International Financial Reporting Standards (IFRS): Advisory services, training and updates can ensure an organisation’s alignment with international standards in financial practice.
It should be clear that currently almost any business can make use of an FSSC. The facilities provided by Strategic Accounting Solutions make it possible for any SMME or Medium enterprise to share in these benefits.
Cacciaguidi-Fahy S, Currie J, & Fahy M (2002) Financial Shared Service Centre Opportunities and Challenges for the Accounting Profession ACCA Research Report 79. Certified Accountants Education Trust, London. http://www.accaglobal.com/content/dam/acca/global/PDF-technical/outsourcing-publications/rr-079-002.pdf. Accessed on 12 August 2013.