A shared service center is an internal organisation that centralises support functions performed until then by each entity of a group separately. Rather than eight accounting teams processing supplier invoices in eight subsidiaries, one team handles the volume for all of them under a defined service level.
Finance functions are the usual first scope: accounts payable, accounts receivable, general accounting, payroll, and increasingly treasury. The stated gains are standardisation of process, economies of scale on volume, and a level of expertise no individual entity could sustain alone.
A shared service center is remunerated by the entities it serves, normally through the cost-plus method applied to its cost base and spread by cost allocation keys. That remuneration is an intragroup flow like any other, so it must rest on a written intercompany agreement and hold up to a transfer pricing review.
Where the gains stall is predictable: a shared service center centralises the people without harmonising the systems. The same team now works across six ERPs, six charts of accounts and six approval matrices. Volume is pooled, complexity is not. Headcount falls, but processing time per invoice does not, because each entity still has its own rules and each exception still requires knowing which entity it belongs to.
That is where the harmonisation layer earns its place. Consolidating data from multiple ERPs gives the centre a single working base across entities, and the accounting inbox agent handles intake whatever the format and whichever entity it concerns.
