Finance Shared Service Centres: Benefits and Challenges

If you work in any corner of the finance sector, it's likely you’ve heard of Shared Service Centres (SSCs). If you have, you’re probably also aware of the potential savings they bring — with some reports that the move to an SSC reduces operational costs by up to 50%.

Essentially an outsourcing initiative, businesses across EMEA and the world are increasingly turning to SSC models to streamline operations and generate efficiencies. The savings they generate are driving a global trend: In 2023, the SSC market reached a value of over $51 billion, up from $44.3 billion in 2022, and now has a projected growth rate of over 16% up to 2032. 

SSCs can have a particularly positive impact on the finance function, where companies stand to benefit from a centralisation of functions, and from the economies of scale that emerge thanks to the consolidation of disparate workstreams. 

But those outcomes are by no means guaranteed. SSC adoption is fraught with obstacles, which means finance leaders need to take a flexible, creative approach to their migration in order to both mitigate challenges and seize opportunities. And central to that effort is the need to leverage software, like FloQast, to power the SSC migration and unlock unrealised efficiency benefits over the long term.

With that in mind, in this blog, we’re going to explore the impact of the SSC on the finance function: we’ll discuss key opportunities and challenges, how to optimise your SSC operations, and why your choice of SSC can make a difference. 

Defining the SSC

A Shared Service Centre (SSC) is a unit within a larger organisation that consolidates and centralises key business processes, such as finance and accounting, at a single location. 

The primary goal of an SSC is to reduce its parent-company’s operational costs while increasing efficiency. To that end, SSCs are often established in overseas territories in order to take advantage of various business and regulatory incentives, thereby optimising the value of the services outsourced. 

In order to implement an SSC, companies need to initiate a transition process during which they move infrastructure and team members to the SSC location. In the case of finance, this may entail moving some or all of the accounting team to the SSC — which typically involves some degree of internal planning and restructuring. 

Shared Service Centre Benefits for Finance Teams

Broad SSC value drivers for parent companies include delivery of management information for internal analysis, support for decision-making and forecasting, partnership in the execution of business initiatives, and the provision of strong transactional controls and regulatory compliance.

Let’s drill down into that value by looking at some of the specific benefits of a shared service for finance. 

Economies of scale

The consolidation of services generates economies of scale — thanks to reduced overheads, streamlined procurement and resource allocation, and shared technology tools.

Process efficiency 

SSCs support and streamline numerous finance functions, such as payroll, accounts payable, accounts receivable, and so on.

Standardisation

SSCs can help finance teams apply global standards to reporting and compliance processes, centralising the relevant controls and making them easier to track.

Centralised visibility

By centralising month-end processes and controls, SSCs enhance visibility and oversight, helping to identify bottlenecks faster, and track team member progress more accurately. 

Cost Savings

Consolidation of finance service yields cost reductions through the elimination of redundant roles, and the streamlining of operational expenditures, such as technology licensing.

Scalability

SSC can help businesses scale their finance operations — while removing the need to establish local finance teams in new expansion locations.

Access to skilled professionals

SSCs help attract skilled accounting professionals by offering career development opportunities, global mobility, specialised training, and competitive compensation packages. 

Optimising Your SSC Transition

The shared service centre model that your organisation adopts will significantly affect your ability to manage challenges and optimise the impact of your transition. While no two implementations are exactly the same, finance teams typically converge around the following SSC models: 

1. One Team SSC: A central finance leader oversees a team distributed across locations, with only part of that team structured as an SSC. The SSC head is integrated into the broader leadership and collaborates across teams.
2. Internal SSC: The company sets up a separate legal entity to deliver services to its own group companies. The SSC head focuses on hitting internal KPIs and service targets.
3. Third-Party SSC: An external provider, such as a Big 4 company or similar, delivers SSC services. The setup mirrors an internal SSC, but is managed by an outside partner.

Anticipating Shared Service Centre Finance Challenges

Even if the case for outsourcing the finance function to an SSC has been made, the transition itself will inevitably involve friction. Let’s explore key issues and challenges, along with some tips for addressing them. 

Challenge: Knowledge drain

Employee turnover in the accounting sector can be as high as 30% in some employee segments, with departing team members  taking valuable institutional knowledge with them.

Solution: 

Carefully plan your employees’ SSC transition. Focus on succession planning and training programmes to protect institutional knowledge during periods of high staff turnover. 

Challenge: Early-stage operational gaps

When SSCs launch without clearly defined roles, responsibilities, or performance benchmarks, that lack of structure can lead to confusion and increased rework and review.

Solution:

Move quickly to establish clear roles and responsibilities before your SSC becomes operational. Introduce SSC KPIs, and integrate management tools to guide teams. 

Challenge Communication blocks

Communication friction across time zones and borders can obstruct information flow to and from SSCs, hampering transparency, reporting accuracy, and feedback.

Solution:

Integrate tools, such as instant messaging and conferencing software to connect the SSC with HQ. Implement a check-in schedule to formalise a culture of ongoing communication.

Challenge: Data blocks

When SSC systems operate in isolation from central IT infrastructure, teams in HQ may struggle to retrieve critical data.

Solution:

Centralise your SSC tech stack in order to control and secure document access, promote standardisation of processes, and establish a single source of truth. 

Challenge: Global regulatory hurdles

Cross-border SSCs often face the added burden of aligning with multiple regulatory frameworks and accounting practices.

Solution: 

Adopt a flexible global compliance posture to capture all SSC regulatory risks. Recruit local compliance experts to your SSC team and involve them in early-stage planning.

The FloQast Advantage

When you’ve determined what your SSC will look like, you’ll need to start planning the transition of your finance function to the new environment, factoring in priorities such as the timeline for your transition, your plan for addressing the challenges outlined above, and what the best SSC finance software will be to achieve your objectives. 

FloQast is purpose-built to support finance teams through periods of significant change, including the move to an SSC. Our platform centralises and automates core finance processes, helping organisations standardise workflows, reduce friction, and enhance collaboration across teams and borders — while maintaining visibility and control. 

We’ve helped some of the world’s biggest enterprise organisations navigate their SSC challenges and optimise the impact of their outsourced finance function in its new environment. So whether you’re migrating accounting workflows or overhauling your entire finance operation, FloQast can help you build structure, scalability, and compliance into your SSC model from the ground up. 

Ready to streamline your finance operations? Find out how FloQast can help make your SSC transition a success story.