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How AP Automation proves the case for Shared Services
Shared services are a tried and trusted way of consolidating a wide range of services across a business to introduce operational synergies and bear down on costs. Although Shared Service Centers (SSCs) create value they do not generate revenue which means their contribution is often overlooked.
This passive view of shared services is a barrier to renewal and innovation. In this blog post, we argue that SSCs could access even greater efficiencies and savings by adopting new technologies, especially in the Accounts Payable space.
One obstacle to transformative change is that the SSCs themselves underplay their role within the organization and this role is pivotal as we shall outline next.
What is a Shared Service Center (SSC)?
A shared service center (SSC) is a centralized unit within an organization that provides services for a range of functions that do not directly generate revenue for the company but are still essential for its operation. Some common functions often handled by SSCs include accounting and finance, human resources, IT, customer service, procurement, or facility management.
By handling these functions via SSCs, organizations can benefit from:
- Cost savings: SSCs can help organizations save money by consolidating these functions into a single unit and taking advantage of economies of scale.
- Improved productivity: SSCs can help organizations boost productivity by standardizing processes and using best practices.
- Increased quality: SSCs can help organizations improve quality by using specialized tools and technologies.
- Reduced risk: SSCs can help organizations reduce the risk of errors and fraud by centralizing controls, using advanced tools, and implementing robust risk management processes.
Let’s explore the issues that prevent some SSCs from achieving these positive outcomes, with a focus on finance and accounting functions, specifically Accounts Payable.
The challenges to Shared Services – and how to resolve them
Demonstrate value to the business
Shared services are often seen as transactional hubs, focused on processing data and completing tasks. However, to be truly successful, shared services need to move beyond this transactional mindset and focus on delivering value and insights to the business.
Furthermore, SSCs are expected to articulate how they are contributing to the overall strategic goals of the business.
To achieve this, they must develop stronger relationships with internal customers and work to understand their needs and challenges as well as collect their feedback. They should also invest in analytics and reporting capabilities so that they can be transparent and provide the data necessary for internal stakeholders to make informed decisions. In addition, SSCs should define KPIs to clarify and quantify their central importance to the business.
Deploy AP Automation to enhance the SSC value proposition
If SSCs deployed technologies to automate Accounts Payable processes, organizations would benefit in several important ways:
- Improved productivity. Invoices are processed faster and more efficiently. This can lead to improved cash flow, reduced late payments, and better relationships with suppliers.
- Increased accuracy. This reduces errors and disputes and can also lead to better financial reporting.
- Demonstrate value to the business by providing specific metrics. Identify and resolve problems quickly, improve productivity over time, and make better decisions about AP process flows.
For example, Cevinio Analytics Suite provides users with multiple dashboards, giving intuitive insight into productivity, the approval workflow, and the time invoices spend in the system.
Navigate the complexities of financial compliance
Shared services organizations are often responsible for managing complex financial compliance requirements. This can be a challenge, especially given the ever-changing regulatory landscape.
To address this challenge, SSCs need to invest in compliance expertise and different technologies such as the Cevinio solution mentioned above. They should also be focused on developing strong relationships with their internal auditors and other compliance stakeholders so they stay up to date on the latest regulatory changes. Implementing a robust risk management framework is another strategy to ensure compliance.
Deploy AP automation to ensure global and local compliance
When you use a single AP automation platform for all Accounts Payable processes, this helps you streamline invoice processing and makes it easier to identify and address compliance risks. Cevinio offers several features that can help businesses comply with all relevant regulations related to AP processing, including:
- Automated PO matching: match invoices to purchase orders and goods received notes, which can help prevent duplicate payments and ensure that invoices are paid accurately and on time.
- Automated non-PO coding: automatically code invoices based on your accounting rules, which can help to ensure that invoices are properly classified and accounted for.
- Audit trail generation for each posting: generate an audit trail for each invoice posting, which can help you track changes to invoice.
- Multi-level approval workflow: Cevinio allows you to create multi-level approval workflows for invoices, so your invoices can be approved by different approvers, which can help to ensure that invoices are properly reviewed and approved by the appropriate individuals.
Harness the power of digital transformation
Digital transformation is rapidly changing the way businesses operate. SSCs need to harness the power of digital transformation to improve their efficacy and effectiveness.
This can be done by investing in new technologies, such as automation, artificial intelligence, and machine learning. Creating a digital roadmap will help organize steps and eventually cover all required areas. SSCs should also foster a culture of innovation and experimentation.
Unleash the power of autonomous invoice processing
One way in which SSCs could raise their profile within an organization is by adopting technology to perform invoice processing. Solutions such as Cevinio Autonomous AP invoice processing can automate the entire invoice processing cycle, from invoice capture to approval to exporting in the relevant ERP.
Progress towards a cost-efficient AP function
As mentioned earlier, automation technologies are a vehicle toward cost-effectiveness, visibility, compliance, and also cost savings. Here are some examples of how AP Automation can help SSCs achieve Accounts Payable cost savings.
- Reduce labor costs by automating time-consuming and repetitive tasks such as data entry, invoice routing, and approval workflow, freeing SSC staff to focus on more strategic tasks such as supplier management or fraud prevention.
- Process invoices more quickly and efficiently leading to reduced cycle time and the avoidance of late-payment fines.
Develop and retain talent
The shared services industry is facing a talent shortage. This is due to several factors, including the aging workforce, the growth of the gig economy, and the increasing demand for digital skills.
To address this challenge, SSCs have to invest in training and development programs. They also need to create a competitive work environment that attracts and motivates talented employees, for example by offering flexible work arrangements, promoting a culture of diversity and inclusion, or recognizing and rewarding high performers.
Yes, automated AP processes can help you recruit loyal talent! As technology automates repetitive and time-consuming tasks involved in invoice processing, AP agents have more time to invest in strategic and value-added activities. As a result, SSCs can increase AP career satisfaction by making the jobs more meaningful and attractive. Additionally, SSCs using AP software will be providing the AP team with opportunities to develop new skills and improve existing ones. As a result, you would be making the AP job more interesting to top talent and existing employees.
At Cevinio we count on training programs to ensure your AP agents and other users learn how to properly use the solution and develop new skills, resulting in higher adoption and satisfaction, among other benefits.
Manage change effectively
SSCs are often involved in change initiatives, such as the implementation of new technologies or the consolidation of processes. Managing change effectively is essential to the success of these initiatives.
To manage change optimally, SSCs need to communicate openly with their stakeholders, involve them in the planning process, and support them during the transition. To ensure you don’t miss out any steps, it is paramount to develop a change management plan, monitor the change process, and adjust it as and when you need.
When managing change in Accounts Payable, you must consider the impact of the technology on everyone inside and outside the department. In this blog post, we cover the importance of change management in AP and the key elements of a change management plan.
Shared services face challenges that demand strategic solutions. The implementation of advanced automation solutions is often an essential part of such a successful strategy, especially in Accounts Payable, where automated invoice processing can help boost productivity, increase cost savings, and improve compliance.
Cevinio is one of the leading AP invoice automation solutions in the market. We focus on serving large organizations and SSC structures. Discover how we can meet your unique needs during a private session with our sales team.