As a business grows into more entities, regions or countries, the finance function usually grows with it one hire at a time. Before long, five teams are processing invoices five different ways, the close takes longer every quarter, and nobody is quite sure which process is the right one.
A finance shared services hub is often the answer. But not always. Here is how to tell, and how to do it well if it is right for you.
What a finance hub actually is
A shared services hub, sometimes called a regional finance hub or centre of excellence, brings the repeatable finance work of several entities into one team, working to one set of processes and one set of standards. The entities keep their local finance leaders for business partnering and local requirements, while the hub handles the high-volume transactional and control work.
Signs a hub could help you
- Several entities or countries do the same work, such as paying suppliers or reconciling accounts, in different ways.
- The close is inconsistent: some entities are fast, others are always late.
- Controls depend on individuals rather than processes.
- You plan to grow into new regions and don't want to build a new finance team each time.
- Finding and keeping experienced finance staff in every location is getting harder.
When it is the wrong move
A hub is not a cure for every problem. Be cautious if:
- You only have a handful of entities with low transaction volumes. The set-up effort may outweigh the benefit.
- Your processes are not standardised yet. Moving an inconsistent process to a new team just moves the mess, and makes it harder to see.
- Your systems are fragmented. A hub working across several ERPs with no common data model will struggle. Fix the foundation first, or plan for it in the programme.
What moves to the hub, and what stays local
| Usually moves to the hub | Usually stays local |
|---|---|
| Accounts payable and supplier payments | Business partnering with local management |
| Cash application and collections support | Local statutory and tax requirements |
| General ledger journals and month-end support | Customer and supplier relationships |
| Balance sheet reconciliations | Budgeting and forecasting input |
| Travel and expenses, fixed asset accounting | Decisions that need local judgement |
Choosing where to put it
Location is a balance of talent, language, time zone, cost and regulation. The cheapest option is rarely the best if the team cannot hire experienced accountants, cover the working hours of the entities it serves, or speak the languages it needs. Visit the shortlisted locations, and talk to companies already running hubs there.
How to set it up
- Assess. Map today's processes, volumes, people and systems in each entity.
- Standardise. Agree one process, one set of policies and one chart of accounts approach before anything moves.
- Design the model. Scope, location, structure, service levels and how the hub and the entities will work together.
- Pilot. Move one process for one or two entities first, and learn from it.
- Migrate in waves. Entity by entity, with knowledge transfer and parallel running where the risk is high.
- Run and improve. Measure, automate and keep improving once the work is in one place.
Measure it from day one
A hub should run like a service, with agreed service levels and a small set of KPIs reviewed every month: close timeliness, reconciliations completed and signed off on time, invoices processed first time right, cost per transaction and customer satisfaction from the entities it serves. What gets measured is what improves.
The most common mistakes
- Lift and shift. Moving work before fixing it.
- Underestimating change. Local teams need to understand what is changing, why, and what their new role is.
- No service levels. Without them, the hub and the entities argue about expectations instead of results.
- Automating last. Once the work is standardised and in one place, it is the best moment to automate reconciliations, workflows and reporting. Build that into the plan, don't leave it for later.
Done well, a finance hub gives the CFO consistent processes, stronger controls and one clear view across every entity. Done badly, it moves the same problems somewhere else. The difference is almost always in the preparation.
Former VP Finance for Majid Al Futtaim's 17-country shared services organization, with controllership roles at Weatherford and NESR. 20+ years of international finance leadership. Based in Houston, TX.
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Ben Taher · 7 min read