Shared Services

One of the most effective ways to cut costs out of shared services is to charge services back to the parent company. Rather than being allocated funds as a cost-center, some shared service centers bill a per-transaction fee to the individual business units or departments that they service.

The major benefit of charging back is that it can influence behavior at the business units. Implementing a chargeback structure based on type of activity can… Read More

Shared services, the consolidation of business operations, usually “back office” or support operations, into a single independently-functioning unit, has been around for some time. It started gaining adoption in the private sector in the early 1980s, and within the public sector starting in the late 1990s. It has gained ground since: in a 2015 AP & P2P Network Survey, “The State of Accounts Payable,” 23 percent of respondents… Read More

Our question this month comes from member and Editorial Panelist Angela Spells, Accredited Payables Manager, Goodwill Industries of Central Indiana. Background Angela explains that the AP department at Goodwill is reviewing and drafting out what would be the pros and cons of moving to a shared services environment and hiring a purchasing manager. Goodwill's… Read More

Briggs & Stratton Corporation, headquartered in Milwaukee, Wisconsin, is the world’s largest producer of gasoline engines for outdoor power equipment. The shared services department is headed by the financial reporting and shared services director and comprises the following positions: Shared services manager; AP supervisor; and AP associates I, II, and III. Shared services responsibilities… Read More

Shared service centers (SSCs) are not a new concept. As far back as the 1970s, organizations centralized AP and other noncore processes. But while these organizations performed AP and other processes in centralized data centers, the methodology of that era was processing-oriented, as opposed to service-oriented.

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Since the 1980s, the shared services concept has evolved into one in which a customer/partner process is collaborative, flexible, and

Chip Johanni was an accounts payable manager at a large insurance company for close to 15 years before becoming a full-time continuous improvement consultant. His AP department had 40 AP associates, processed a million transactions a year, and sent out $79 million a day in disbursements. “In a department with that kind of activity,… Read More

Setting up shared-service centers (SSCs) for finance and accounting operations is a great cost-saving idea—as long as performance remains high. However, as pointed out in a recent Sungard white paper, Improving the Performance of Your F&A Shared Service Center, many companies that implemented shared services for finance and accounting soon realized that any cost savings… Read More

After a series of impressive accomplishments in accounts payable, the shared services team that supports the hospitals of the University of Maryland Medical System (UMMS) was awarded the prestigious AP Department of the Year Award for 2015. The team’s manager, Bethany M. Mezzadra, APM-D, MBA, Director of Disbursements, accepted the award on behalf of… Read More

Shared services is the standardization, re-engineering, and consolidation of non-core functions within an organization. Many organizations operate accounts payable from within a shared services center, which allows the function to benefit from streamlined processes and economies of scale. According to 2011 benchmarking data, approximately one-third of accounts payable departments operate within a shared services… Read More

While any change can be disconcerting, the change to a shared services environment can be a positive development for AP. There are numerous benefits, including streamlined, automated, and standardized processing—and, of course, lower costs. "The idea behind shared services is to continually evolve core processes so that AP can see productivity gains. AP can also develop additional service capabilities that help internal customers do tRead More

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