# Adopting a Centralised Strategy – the Holy Grail of Statutory Reporting
Author:  Pal Sinha, Barnali 
Author URL: https://financedigest.com/author/pal-sinha-barnali
Published: 2019-04-16
Category: BUSINESS
Category URL: https://financedigest.com/category/business
Meta Title: Overcoming Statutory Reporting Challenges with Shared
Meta Description: Briony Kempton from Thomson Reuters discusses how shared service centres can help multinational corporations overcome statutory reporting challenges and
Tags: featured
Tag URLs: featured (https://financedigest.com/tag/featured)
URL: https://financedigest.com/adopting-a-centralised-strategy-the-holy-grail-of-statutory-reportinghtml

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_**Briony Kempton**, senior proposition manager, ONESOURCE Statutory Reporting, EMEA at_ [_Thomson Reuters_](https://www.thomsonreuters.com/en/products-services/tax-accounting.html) _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](https://www.financedigest.com/how-china-became-big-business-for-twitter-from-blocking-to-blue-checks.html "How China became big business for Twitter, from blocking to blue checks") 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](https://www.financedigest.com/finance-teams-using-ai-outperform-peers-as-demand-for-skills-grows.html "Finance Teams Using AI Outperform Peers as Demand for Skills Grows") 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](https://www.financedigest.com/havas-media-group-partners-with-lumen-research-to-measure-and-optimise-attention-at-global-scale.html "Havas Media Group Partners with Lumen Research to Measure and Optimise Attention at 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](https://www.financedigest.com/business-leaders-flexibility-for-everyone-contributes-to-gender-equality-in-the-workplace-without-affecting-your-bottom-line.html "Business leaders: flexibility for everyone contributes to gender equality in the workplace, without affecting your bottom line"). 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](https://www.financedigest.com/four-ways-data-and-ai-can-transform-financial-services.html "Four ways data and AI can transform Financial Services") 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](https://www.financedigest.com/germany-u-s-agree-to-new-covid-curbs-as-omicron-spreads-across-globe.html "Germany, U.S. agree to new COVID curbs as Omicron spreads across 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](https://www.financedigest.com/transforming-vat-how-is-europe-modernising-tax-reporting.html "Transforming VAT: How is Europe modernising tax reporting?").

On top of cost reduction, shared service centres reduce [risk and facilitate better management](https://www.financedigest.com/risk-management-redefined-navigating-post-covid-disruption.html "Risk Management redefined: navigating post-COVID disruption"), 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](https://www.financedigest.com/factbox-the-uks-top-tax-rate-what-is-it-and-why-does-it-matter.html "Factbox-The UK’s top tax rate – what is it and why does it matter?") liabilities.
- [Corporate tax:](https://www.financedigest.com/irish-corporate-tax-boom-breaks-more-records-in-november.html "Irish corporate tax boom breaks more records in November") 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](https://www.financedigest.com/skull-deformity-implants-market-share-top-operating-players-recent-enhancements-and-regional-analysis-2028.html "Skull Deformity Implants Market Share, Top Operating Players, Recent Enhancements and Regional Analysis 2028") 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](https://www.financedigest.com/stellantis-reshuffles-european-financing-operations-through-new-jvs-with-banks.html "Stellantis reshuffles European financing operations through new JVs with banks") level.

**Driving Strategic Value**

Shared service centres eliminate redundancies across large, multinational organisations and therefore, [finance as a department](https://www.financedigest.com/untapped-cost-savings-why-smart-building-management-systems-are-a-finance-department-priority.html "Untapped Cost Savings: Why Smart Building Management Systems are a Finance Department Priority") 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](https://www.financedigest.com/oil-firms-must-step-up-exploration-off-norway-to-unlock-potential-npd.html "Oil firms must step up exploration off Norway to unlock potential -NPD").

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](https://www.financedigest.com/fintech-incubation-more-value-than-meets-the-eye.html "FINTECH INCUBATION: MORE VALUE THAN MEETS THE EYE") 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](https://www.financedigest.com/the-advanced-wound-management-technologies-market-to-grow-based-on-customized-digitization.html "The Advanced Wound Management Technologies Market to grow based on customized digitization") 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](https://www.financedigest.com/finance-operations-efficiency-7-ways-to-slick-up-your-department.html "Finance operations efficiency – 7 ways to slick up your department") 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](https://www.financedigest.com/uk-needs-to-make-politically-unpopular-reforms-to-boost-growth-business-group-says.html "UK needs to make politically unpopular reforms to boost growth, business group says"). Can the transition help [finance departments](https://www.financedigest.com/ai-in-the-finance-department-augmenting-not-replacing.html "AI in the finance department: augmenting, not replacing") integrate and analyse new information on the business quickly and efficiently? Is it sufficiently scalable for statutory [reporting if the company enters new markets](https://www.financedigest.com/cable-cars-and-ropeways-market-report-size-growth-demand-scope-opportunities-and-forecast-2016-2026-fmi.html "Cable Cars and Ropeways Market Report | Size, Growth, Demand, Scope, Opportunities and Forecast 2016-2026: FMI")?

[Businesses need](https://www.financedigest.com/pstn-isdn-switch-off-what-businesses-need-to-know.html "PSTN/ISDN switch-off: what businesses need to know ") 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](https://www.financedigest.com/customer-journey-the-key-for-business-growth.html "Customer Journey – the key for business growth") globally, address regional regulators’ demands and leverage data that exists in and across the organisation.

**Managing Multiple Jurisdictions**

Because [business is global](https://www.financedigest.com/cup-holder-market-emerging-industries-challenges-and-threats-faced-by-key-vendors-and-global-business-outlook-till-2031.html "Cup Holder Market Emerging industries, Challenges and Threats Faced by Key Vendors and Global Business Outlook till 2031"), 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](https://www.financedigest.com/ifrs-15-moving-away-from-short-term-fixes-is-vital-for-effective-compliance.html "IFRS 15: Moving away from short-term fixes is vital for effective compliance") from manual tasks that fail to deliver adequate strategic value. These teams can become more nimble with the [backing of a shared service](https://www.financedigest.com/tesco-says-online-services-back-up-after-interference-attempt.html "Tesco says online services back up after interference ‘attempt’") 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](https://www.financedigest.com/9-issues-in-corporate-finance-and-strategies-to-overcome-them.html "9 Issues in Corporate Finance and Strategies to Overcome Them"), so why not statutory reporting? If the management of the [finance function](https://www.financedigest.com/easing-the-burden-of-data-overwhelm-in-finance-functions.html "Easing the burden of data overwhelm in finance functions") 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](https://www.financedigest.com/analysis-war-in-ukraine-puts-pressure-on-east-european-banks-to-prop-up-sinking-currencies.html "Analysis-War in Ukraine puts pressure on East European banks to prop up sinking currencies") 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](https://www.financedigest.com/is-the-road-to-data-transformation-slowing-digital-transformation.html "Is the road to data transformation slowing digital transformation?") 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](https://www.financedigest.com/the-importance-of-data-analytics-for-success.html "The Importance of Data Analytics For Success ") 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](https://www.financedigest.com/uk-cabinet-was-not-informed-of-plans-to-scrap-top-rate-of-tax-truss-says.html "UK cabinet was not informed of plans to scrap top rate of tax, Truss says") and cash positions – an insight many senior leaders value.

**Conclusion**

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](https://www.financedigest.com/gonorrhea-therapeutics-market-value-share-supply-demand-share-and-value-chain-2021-2031.html "Gonorrhea Therapeutics Market Value Share, Supply Demand, share and Value Chain 2021-2031") to management. For those teams, the benefits of shared service centres are clear. They [drive easier management](https://www.financedigest.com/education-security-in-2022-hybrid-cloud-device-management-drives-it-challenges.html "Education Security in 2022: Hybrid-Cloud, Device Management Drives IT Challenges") 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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