ACCA Strategic Professional · Strategic Business Leader · Finance transformation
Valdora Group has finance staff in eight countries, each running its own accounts payable, payroll and general ledger processes with different software. The CFO proposes moving routine transactional processing into one location, using common processes and systems, so that the business units are served on an internal customer basis. Which finance operating model does this describe?
This is a shared service centre. Routine transactional finance work is consolidated into one internal unit using common processes and systems, and it serves business units as internal customers. Outsourcing would use an external supplier, and a centre of excellence focuses on specialist expertise rather than high-volume processing.
- AA shared service centreCorrect
- BA decentralised model with local autonomy
- COutsourcing to an independent third party under a commercial contract
- DA centre of excellence providing specialist advice only
Explanation
Consolidating high-volume transactional activities such as payables and payroll into one internal unit with standard processes and service to business units is the defining feature of a shared service centre. Outsourcing would transfer the work to an external provider, which is not proposed here. A centre of excellence concentrates specialist expertise rather than routine transactions.
Did you get it right without looking?
One question tells you little. A timed set on Finance transformation shows your real accuracy, how long you take and where you lose marks.
More Finance transformation questions
- Dunmore Retail plans to move its payroll and receivables processing to an SSC. A director warns of a significant risk that is specific to th…
- Brindle Foods has a shared service centre handling accounts payable for four divisions. Management wants to decide whether to keep the activ…
- Orlin Ltd is considering how to structure finance after a systems upgrade. It wants a small group of senior specialists in treasury, tax and…
- Halden Group is outsourcing its payroll and accounts payable to a third-party provider as part of finance transformation. The board expects …
- Verdant Retail's finance function plans to use machine learning to forecast cash flows using sales, weather and promotion data. A director s…
- Harbour Freight plc's finance team spends most of each month manually keying supplier invoice data into the ledger and matching it to purcha…