Shared service centers and collection factories are often-heard buzzwords today. This fact is also reflected in the high number of participants of our recent webinar (in German) about shared service centers. But, what exactly do these buzzwords mean and how could they help improve your cash allocation? Why do more and more organizations use shared service centers and payment factories and what has to be considered for implementation?
We will briefly address these questions in this newsletter, because maybe you, too, are thinking about realizing such a central structure for your organization and are looking for introductory information on this topic. So, here we go:
Shared service centers are, as the name suggests, a central instance shared by multiple business units in which different tasks of the organization are bundled. Often, these are tasks from the areas of HR and finance, executed centrally in one location. A collection factory supports this organization and allows corresponding process optimization with all required functionalities.
A shared service center is especially advisable if an organization has several national and/or international subsidiaries. In such complex organizational structures, tasks are often performed twice and central control of the organization's cash flows is almost impossible. Numerous banks and banking tools, used by different employees in different locations combined with insecure temporary storage in company networks that is often required – all this carries risks and makes processes inefficient.
For this reason, more and more organizations rely on shared service centers as they facilitate more efficient processes and central control of all sensitive data and cash flows. Those who want to go a step further and also want to perform collections "on behalf of" or process the entire AR management technically optimized in SAP can find additional benefits in implementing a collection factory. A collection factory, set up in the head office, in a shared service center or in a subsidiary, can centrally process bank statements and all other relevant data from customers on behalf of all subsidiaries. This makes essential cash flow data available to management very quickly and reliably for important decision-making.
Hanse Orga has already successfully supported several shared service center and collection factory approaches and supported customers around the world successfully with the optimization of their processes. The SAP-integrated FinanceSuite solutions have been proven to be especially valuable, as they support all formats available in SAP and also numerous additional formats incl. SEPA, CGI and all common local formats. This is especially important for cash allocation as, in contrast to outgoing payments, organizations cannot define the formats themselves but have to process the different formats they receive from customers.
With the FinanceSuite solutions organizations can master the challenge resulting from the different formats with confidence. You can find one example how FinanceSuite AutoBank Automatic Cash Application is used in a shared service center in our Case Study for Siemens AG.
For additional information about collection factories in general, please also look at our Whitepaper. If you would like to learn more, please contact us so we can show you the advantages of the solutions in a free live demo.