Traditionally, F&A SSCs have worked in a siloed environment with separate business objectives and processes, restricting the exchange of information. But today, businesses are using SSCs to achieve cost and operational efficiencies for managing back-end F&A or O2C processes related to customer payment processing, billing, credits, and collections.
O2C SSCs mainly handled targeted tasks and were not adding value to the core business. There was less focus on process innovation, automation of workflows, and generating real-time insights. The main activities only included standardization of the ongoing processes, leading to the commoditization of business processes, impacting business growth.
GBS Model Acts as a Centralized Organization Handling End-To-End Operations
In the SSC model, the shared services center is a separate entity that has emerged from the core organization and is responsible for providing services to its local business units. The GBS model sets up a global, integrated, and centralized organization that provides comprehensive and complex end-to-end processes.
A GBS that could enable intercommunication between processes could generate real-time insights for business leaders. This resulted in the inception of global innovation centers (GICs), which provide an environment where processes no longer work in silos and a technologically advanced workforce and can proactively identify roadblocks.
Decision-makers such as A/R executives need support for tasks such as reducing process cost, managing cash flow, maintaining customer relationships, improving visibility on payment disputes, and providing foresight on credit and payment risk customers. All this becomes possible through a centralized service delivery like GICs.
Technology has the potential to offer customized solutions for specific processes or sub-processes. For instance, it can be used to run a real-time cash application process and bring the processes at par with any other process in an organization.
GBS acts as a catalyst in the overall digital transformation of a business, assisting them in establishing new operations and enhancing existing ones. But the transformation also increases interaction among the processes, both in volume and complexity. This is where automation tools are needed to reduce the cost of labor and make intelligent decisions.
45% of global GBS leaders foresee an increase in GBS focus on digital experience and AI-driven automation. Service delivery should be cost-effective, customer-focused, and efficient in a shared accounting services framework. Innovative solutions adopted by shared services leverage technology to provide scalable and repeatable solutions.
Automation of A/R operations brings enhanced visibility across processes and contributes to improvement. The accounting processes facilitate resource efficiencies that can be channeled towards business development initiatives. GBS centers deal with limited service areas such as account payables and receivables as more transactions are automated.
For example, self-learning algorithms predict payment dates and identify the risk of non-payment/Integrating this information across processes leads to gaining relevant business insights.
Future-ready businesses adopt practices that combine human and machine intelligence, leveraging modular data and technology with scalable processes to improve the operational efficiency of the workforce.
Digitization of A/R operations brings enhanced visibility across processes and contributes to their improvements by enabling the continuous benchmarking needed for achieving a best-in-class system. GBS executives are tasked with multiple responsibilities in order to stay abreast of their market competitors and to leverage cutting-edge technology to elevate A/R teams in the CFO’s office.
GBS executives should be looking forward to evolving their shared services from a cost-optimization center to a global innovation center.Read the eBook linked below to understand the best practices for GBS leaders to build their tech stack and go about executing a successful digital transformation project.
HighRadius Integrated Receivables Software Platform is the world’s only end-to-end accounts receivable software platform to lower DSO and bad-debt, automate cash posting, speed-up collections, and dispute resolution, and improve team productivity. It leverages RivanaTM Artificial Intelligence for Accounts Receivable to convert receivables faster and more effectively by using machine learning for accurate decision making across both credit and receivable processes and also enables suppliers to digitally connect with buyers via the radiusOneTM network, closing the loop from the supplier accounts receivable process to the buyer accounts payable process. Integrated Receivables have been divided into 6 distinct applications: Credit Software, EIPP Software, Cash Application Software, Deductions Software, Collections Software, and ERP Payment Gateway – covering the entire gamut of credit-to-cash.