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Increasing the Scope of Shared Services Record-to-Report Processes

Record-to-Report (R2R) can cover a wide range of internally-focused accounting processes connected with the recording of transactions to comply with financial, legal, and tax requirements, with outputs including performance reporting, plus management, legal, tax, and treasury reporting.  Unlike other common end-to-end processes including Purchase-to-Pay, Hire-to-Retire, and Order-to-Cash, the associated work processes are insular to the company, without significant points of interface with external parties.  As a result, work processes evolve in isolation, without the positive influences that can result from processes requiring clean interfaces with external customers or suppliers. 

While the underlying work processes in Record-to-Report are all within the same functional area (Finance and Accounting), individual activities include a mix of decentralized work steps that take place at the business unit level or by country/geography and work activities that are consolidated either in a centralized Corporate Accounting group or managed as part of a Shared Services delivery model.  Processes within scope most often include General Ledger, Management Reporting, Financial Reporting, Fixed Assets, and Intercompany Accounting, with other processes like Legal and Tax Reporting, and Financial Planning & Analysis potentially within scope.   While a centralized or Shared Services approach offers the greatest opportunities for process improvement and efficiency, because of process complexity and a perceived need for local control, reducing local staffing levels and fully transferring work activities can be a challenge. 

A recent PeercastTM in the General Accounting (R2R) research area featured a $13B company with operations largely in the U.S. at over 1,000 locations.   In an industry undergoing intensive cost pressure, there was a need to redesign the Record-to-Report process to transfer significantly more work activities to Shared Services which would effectively double the number of processes and work activities within scope.  Objectives that guided this effort included:

  • Consistently delivering accurate and timely financial information
  • Eliminating rework and non-value added activities
  • Fixing broken processes and reducing the number of manual touches
  • Influencing and supporting enterprise projects

Through an exercise of reviewing individual work processes and comparing ownership models with other companies, a “future state” was defined that targeted 35 different work processes that could be more effectively managed and delivered using Shared Services.  After prioritizing, several projects were launched, with some taking a few months, and other more substantial efforts taking multiple years to complete.

A related iPollingTM question examined the extent to which Record-to-Report is managed as an end-to-end process at member companies.  The results indicate that 33% of the responding companies have defined end-to-end Record-to-Report processes that are managed globally, 21% are managed regionally, with 13% have implemented on a country basis.  An additional 29% have not yet been implemented, with plans to move in this direction in the future.

Here are the details:

The second poll question asked about the relative priority member companies will place on increasing the level of integration across Record-to-Report processes over the next 1 – 3 years.  Interestingly 71% of companies indicated priorities levels of either high or very high, with only 21% indicating this priority would be considered moderate.

Because the majority of Record-to-Report processes are completely internal to a company’s Finance/Accounting area, reviewing these processes is less likely to get attention than processes that touch a larger number of employees or directly interface with external customers or suppliers.  For many, that will be good news, since any amount of attention or rigor will likely identify a number of quick wins, plus longer-term investments that will be worth the investment.

How does your company define the scope of services included in the Record-to-Report process? What activities are decentralized with the business or location and what activities have been successfully transitioned to Shared Services or another advanced delivery model?

Who are your peers and how are you collaborating with them?


“PeercastsTM” are private, professionally facilitated webcasts that feature leading member company experiences on specific topics as a catalyst for broader discussion.  Access is available exclusively to Peeriosity member company employees, with consultants or vendors prohibited from attending or accessing discussion content.  Members can see who is registered to attend in advance, with discussion recordings, supporting polls, and presentation materials online and available whenever convenient for the member.  Using Peeriosity’s integrated email system, Peer MailTM, attendees can easily communicate at any time with other attending peers by selecting them from the list of registered attendees. 

 “iPollingTM” is available exclusively to Peeriosity member company employees, with consultants or vendors prohibited from participating or accessing content. Members have full visibility of all respondents and their comments. Using Peeriosity’s integrated email system, Peer MailTM, members can easily communicate at any time with others who participated in iPolling.

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