Rules of Thumb to Create a Roadmap to Accounting Shared Service Success

Time, commitment and vision. These are three essential characteristics of a strong Financial Shared Services (FSS) organization. Companies engaging a FSS strategy will often be on different timelines, start with different parts of their organization and achieve optimization at different rates of pace. In this article, I am going to discuss ways you can create value and scalability throughout your organization with Accounting Services. Accounting Services is typically viewed as transactional activity. However, with a deeper dive, it becomes clear that Accounting Services can drive global standardization and simplification of processes and have the skills to become a key business partner creating value through enhanced services such as; accounting guidance, system/tools selection and M&A support.

Getting Started – Building the Roadmap and Maturity Curve 

It is important to develop a multi-year roadmap because it helps you identify where you are currently and where you want to go. The maturity curve assesses the readiness of the organization to take on change. Depending on the organization’s readiness for change, you may move faster or slower in your standardization and optimization efforts. Things that influence the maturity curve would include: how much funding you have for investment, what kind of standardization projects you need to implement, and how much time and resources are available. Are there other IT system migrations in flight that would impact the timing of the roadmap? Meaning you may need to implement a workflow tool instead of waiting for the benefits of a major system conversion/migration. All of this effort will ultimately help the Accounting Services organization to stabilize, standardize and simplify the day-to-day activities while enhancing the skills of the organization to create value through new service offerings.

Standardization 

Standardization of processes is key to driving organizational performance and is critical if you are operating in a decentralized environment with multiple ERP systems. Standardizing and simplifying the way the teams perform their work allows for consistency of reporting, more effective use of resources and reduces cycle times. If one of the goals is to ultimately scale up the organizational service offerings (across a larger geography or with new offerings), then the basic day-to-day activities must be delivered with high quality and consistency.

We launched the accounting services portion of FSS by establishing three distinct towers of services: credit and collections, record to report, and procure to pay. Let’s use Record to Report for our illustration of some techniques available to drive standardization and process simplification.

Record to Report and, specifically, accounting activity is common across most companies. You need to close the financial books of record timely, accurately, and completely. If you don’t have the benefit of one common ERP system, then multiple ERPs can complicate the activities to achieve consolidated results but the basic steps are similar.  That said, standardization and simplification can start with simple protocols such as a common closing schedule, the ability to track when accounting entries are posted to the system, and establishing consistent reporting. Utilizing a workflow tool for activities such as account reconciliations can drive standardization of risk assessment by requiring consistent protocols, documentation support and timing of review. This can bridge the gap until ERP simplification can be achieved. Timely reporting and communication will begin to build confidence with the business partners that effective controls are in place to mitigate unwanted financial surprises. From there, scaling up the services provided can begin and will accelerate with the embracement of your business partners.

Scalability

Consistent high-quality service delivery is a key component for building business partner trust. From an accounting services perspective, stability in the day-to-day operations is critical but continuing to only provide transactional services will quickly cause the organization to be viewed as a commodity.  When the business partners have confidence in your ability to deliver consistent services, they often begin to look to accounting services for additional support. This could be more transactional work (i.e.; new acquisitions) or, better yet, the request for higher level analytics and accounting guidance.  Moving beyond transactional work can be initiated by the accounting organization or by the business partner. Together, this creates the opportunity to demonstrate enhanced skills of the accounting teams to provide expanded financial knowledge to the business partners. This begins the opportunity to expand service offerings.

Keeping the Accounting Services Vision and Road Map in mind, expanding services offerings should be thoughtful and aligned to the vision. Simply adding work to the organization that is not a natural fit will grow the size of the organization but will not necessarily be a successful service offering. This is where discussion with the businesses and alignment of the Accounting Services vision comes into play.

To help with your process, try to follow these rules of thumb: 

1. Your center must ensure Controls and Vision are aligned 
   Make sure the core services are delivered consistently with high quality even during a period of transition. Make sure that the entire organization is educated on what new processes and strategies are being implemented and how it aligns with the vision. This keeps them engaged and part of the process. Ensure the control environment remains solid.
2. Conduct evaluation to confirm new proposed activities align with vision and charter 
   It is essential to continuously look back at your current activities as well as the goals and objectives of your organization as a whole. Evaluate if the request of new services aligns with the vision and charter of your organization. Does it leverage core competencies? Does it fit with where you are on your roadmap and where you are taking the organization?
3. Develop migration timeline and expectations for onboarding acquisitions
   Within the migration timeline, migrate once the acquisition is on a primary ERP. This will help minimize dilution of your resources and help maintain focus on the overall roadmap for the organization. Review the quality of the financial statements to understand and minimize potential financial risks. Ensure necessary resources are available, funded and meet skill set requirements.

In conclusion

The Financial Shared Services organization is a key player in driving optimization of its own organization and is a business partner for functional project teams, systems deployments, and M&A pre and post-activities. It is viewed as a Center of Excellence and key adviser on accounting best practices and improving the overall financial strength of companies. A key success is the utilization of the Accounting Services organization to connect the dots across business, processes, and practices. This in turn enables you to better scale, organize, and effectively deliver on the goals and objectives of your Financial Shared Service organization.