Overcoming local complexity in a shared service environment
In pursuit of greater efficiency, multinational businesses are increasingly turning to shared service centres to centralise finance, accounting and reporting across global operations. The benefits are clear: streamlined processes, reduced costs and improved consistency at scale. But rising regulatory complexity at local level can make full centralisation challenging. Success depends on combining digital systems with local expertise to complete the “last mile’’ of compliance.
Can you build a successful shared service centre (SSC) as reporting requirements across countries become more complex? The answer is yes – but only if you embed strong local expertise alongside centralised operations.
This is especially true for statutory financial reporting and tax compliance, where local rules, formats and filing requirements continue to diverge across jurisdictions. According to TMF Group’s latest Global Business Complexity Index (GBCI), businesses face significantly higher complexity at local level than at global level when managing statutory reporting obligations, reinforcing the need for in-country expertise.
What is a shared service centre?
An SSC is a centralised operating model where companies consolidate functions such as accounting, reporting and administrative processes to drive efficiency, reduce costs and standardise at scale. While SSCs are highly effective for transactional finance processes, challenges emerge when localised activities, such as statutory reporting and tax compliance, are included.
When operations span multiple countries, varying local requirements can undermine the very efficiencies that make SSCs so appealing. These efficiencies – such as improved processes and reduced costs – must be carefully balanced against local complexity. For organisations evaluating this model, understanding the pros and cons of shared service centres is an important starting point.
Local complexity is increasing
Regulatory requirements can differ significantly across jurisdictions feeding into an SSC and statutory reporting can be particularly daunting. Unlike standardised accounting transactions, statutory financial reporting is judgement-based and shaped by local regulations, language requirements and reporting formats. This makes global standardisation difficult, since requirements are often subject to change.
Finance leaders must navigate reporting in multiple languages, formats and currencies, while also adhering to local Generally Accepted Accounting Principles (GAAP) where applicable. Consequently, local accounting challenges persist, despite efforts to streamline processes and advance digital transformation.
TMF Group’s latest Global Business Complexity Index (GBCI) shows that companies are continuing to grapple with local complexity, particularly across accounting, tax and entity management obligations.
The index reveals that the proportion of jurisdictions requiring all companies to adhere to local GAAP standards has risen to 64%, reinforcing local complexity in global accounting compliance. In response to increasing regulatory demands, organisations are seeking to adopt new technologies to standardise and speed up transaction processing – arguably the biggest draw of the SSC model.
The main challenges facing businesses are managing regulatory fragmentation, rapid change and digitalisation. You need efficient technology to meet requirements quickly, otherwise stricter regulations create massive amounts of extra work. Automating processes and focusing on exceptions, rather than every transaction, helps manage risks effectively.
Tax compliance challenges in shared service centres
Tax compliance presents a distinct challenge within shared service centre models. Filing timelines, documentation requirements and interaction with local tax authorities vary significantly by jurisdiction, increasing the risk of errors and delays when tax processes are treated as fully standardised transactional activities.
This challenge can be addressed by combining centralised execution with targeted local tax expertise to manage jurisdiction-specific compliance requirements effectively.
Balancing technology and local compliance in shared service centres
Don’t just focus on tech
Rapid advances in Enterprise Resource Planning (ERP) systems, Robotic Process Automation (RPA) and agentic AI have yielded significant efficiencies for centralised finance operations. Standardised transactions can be processed faster and at a lower cost, making shared service centres highly effective for transactional accounting.
However, digitalisation alone cannot solve local reporting and compliance challenges.
Where global ERP models fall short
A finance shared service centre is typically designed to carry out a single process – such as transactional accounting – more efficiently than localised teams. From a corporate reporting perspective, implementing a global ERP system may appear to be the ideal solution.
In practice, this approach often falters when it comes to local compliance. Statutory and tax requirements differ by jurisdiction and change frequently, making it impossible for technology alone to cover every obligation in every country.
Language requirements, local legislation and tax changes inevitably require manual intervention and specialist expertise. Organisations pursuing multi-country finance system localisation can benefit from a clear, practical approach that reduces risk, improves efficiency and supports sustainable compliance.
The limits of standardisation
How can organisations realistically keep up with statutory reporting requirements across multiple countries when rules are constantly evolving? At some point, fully standardised processes reach their limit.
A delicate balancing act is required to align centralised operations with local regulatory realities. Understanding where shared service centres deliver the most value – and where local statutory and tax requirements restrict standardisation – is critical for long-term compliance and risk management.
The role of local expertise
So what’s the best way forward for finance leaders looking to centralise finance and accounting functions while ensuring local compliance?
The answer lies in integrating local expertise into the shared services model. Organisations operating across multiple jurisdictions need access to experts who understand local compliance requirements. Timing is critical – regulatory change is accelerating as jurisdictions seek to recover revenues lost during the pandemic or address tax avoidance, increasing the pressure on finance leaders.
Completing the “last mile” of the SSC model
To minimise risk now and in the future, finance leaders must balance digital transformation with effective local compliance management – even as they face intensifying demands to improve efficiency and outsource selected activities.
This requires a more strategic approach to shared services: leveraging technology-driven centralisation for high-volume transactional processes, while relying on local expertise to manage statutory reporting and tax compliance. Together, these elements complete the “last mile” towards sustainable efficiency.
Key takeaways
- Centralising finance, accounting and reporting through an SSC improves consistency, speed and cost control
- Regulatory, tax and statutory requirements vary widely across jurisdictions
- Standardising local reporting obligations across multiple countries can be challenging at scale
- ERP systems and automation improve efficiency, but can’t fully solve local compliance challenges
- Successful SSCs combine centralised systems with local capability
- Local insight remains essential to closing the final gap in statutory and tax compliance
Talk to us
With experts in 125+ offices across 87 jurisdictions, we help you manage your local tax reporting and statutory obligations while integrating seamlessly with your SSC systems and processes.
Speak to our experts to learn more about navigating local compliance challenges and unlocking greater value from your SSC.
