In today’s globalized world, many companies have F&A departments spread throughout a range of geographies, including the Americas, Europe and Asia. Such widespread corporate presence opens the door to markets across the map. But international access presents its share of challenges—especially when it comes to managing cash.
When we’re asked to address client challenges like improving working capital or delivering higher quality, timely reporting, many times one of the first root causes is the “run your own shop” approach to regional and global F&A departments. It’s not uncommon to find each finance function operating its own processes and technologies. As a result, many globalized businesses suffer from significant – and costly – F&A disruptions, needless repetition, undue human error and frequent reporting delays.
The Transformation Essentials
You hear a lot these days about business transformation, in the finance department and throughout any organization. Usually the conversation is in terms of digital transformation. The idea of the F&A function requiring minimal technology is going by the way of the dodo. Business leaders know that automation is key to all areas of success, including the formerly paper-heavy, manual finance function.
But for any company to transform its operations, a wider view of the greater operations needs to happen first. A centralized or shared services approach is key to the initial standardization that is so necessary to gaining the transparency needed to take the first step.
Centralization is well within reach. The key lies in doing it right.
By the Books: Centralizing for Success
For companies transitioning for the first time, uncovering the sheer volume of inefficiencies and anomalies across F&A departments can be overwhelming. (And an unexpected and unwelcome surprise!) Without the right experience, it can be hard to manage the centralization process and mitigate the issues that will invariably arise, such as inaccurate or unrecorded transactions, disparate internal benchmarks and unresponsive accounting staff. Such lack of control and communication is exactly what centralization can resolve— as long as the right partnership is in place.
Communication is integral to adopting a centralized, shared services model. For issue resolution to be successful, it’s necessary to create a strong rapport with accounting staff and to develop new relationships. Companies must engage a trusted partner who will collaborate with all branches to solve the day-to-day challenges of transitioning and establish a foundation for lasting success.
The Big-Picture Benefits
Centralizing accounting functions creates a uniform process that not only increases efficiency but can also have a major impact on the accuracy of companies’ financial statements and manage their cash. For organizations with global operations, that represents a significant gain. Having access to precise, timely reports reduces risk and empowers executives to forecast effectively and make informed decisions about their company’s strategic direction.
For any leader considering business transformation, providing a foundational standardized framework from which to begin to evolve their business processes and leverage intelligent automation can be a first step in their transformational journey.
To learn more about how centralizing global offices can benefit your business and support both your short-term and long-term goals, contact us today for a free assessment of your current practices.