As Shared Services models evolve, new functions and functional extensions have been integrated into service offerings. One area however, that remains relatively under-served is Statutory and Tax Compliance Management. First and foremost, the integration of Statutory and Tax Compliance into shared services is normally considered only when an organization’s existing shared services is stable and credible. ‘Proof of concept’ is an important element in convincing the organization that shared services is ready for the next step. In addition, it normally requires that certain functional capability is in place such as trial balance maintenance, month-end close, balance sheet reconciliations, etc. (it’s pretty hard to maintain the statutory accounts if you don’t have control over these and likewise the preparation of a corporate tax return will be next to impossible). As highlighted in the following diagram, the adoption of Statutory and Tax Compliance is a step taken after a number of other steps have been taken and are in place, working effectively.

1. s Shared Services models evolve, new functions
and functional extensions have been integrated
into service offerings. One area however, that
remains relatively under-served is Statutory and Tax
Compliance Management.
For companies who have done this successfully, the
benefits are undisputed:
• Compliance transparency and risk is managed more
efficiently and effectively
• Front-end Business finance support liberated from the
essential, but distracting nature of compliance
• Corporate Tax departments get more time to spend on
strategic tax initiatives and spend less time being
worried about compliance issues
….and it often costs less – and sometimes considerably
less!
Whilst acknowledging it needs specialized and local
knowledge skills, shared services can be highly effective in
managing the ‘processes’ of Compliance. Compliance – by
its very nature – is incredibly rule bound and predictable.
is is bread and butter to any shared service
organization. However, the reality is that this area is
embroiled in myth, lack of understanding and fear of the
unknown because of the perceived consequences of
getting it wrong.
At Chazey Partners, we bring together people who, for the
past 20 years, have been at the forefront of developing,
testing and running successful Statutory and Tax
Compliance programmes on behalf of many organizations.
We have learned the hard way that it is a difficult
challenge but also that ultimately, it is a better solution.
De-mystifying the challenge
Companies have been attempting to manage Statutory
and Tax Compliance in multi-country environments
through a shared services model since the mid-1990s and
it’s really only over the past 10 years that robust and
workable solutions have evolved. Prior to this there were a
few attempts to do this but marked by a high number of
failures.
Adding Value to Shared Services - Managing
Statutory and Tax Compliance
ere are a number of reasons for such failures but the
most common one involved trying to ‘centralize’ specialist
and ‘local’ knowledge (and effectively establishing a ‘centre
of expertise’). For example, try employing an accountant in
Krakow with the aim of maintaining French statutory and
tax compliance…..not only is that resource hard to get in
Krakow (because they typically live in France!), it also
expensive (they want a French overseas remuneration
package). And should your French compliance accountant
decide to leave for greener pastures or simply go back home
– you are snookered!
So the question arises about how to leverage the capability
of shared services (as centres of excellence capable of
process mastery), while at the same time balancing the
need to establish the capability required to provide expert
knowledge and, keeping abreast of legislation.
Evolution – making the step change
First and foremost, the integration of Statutory and Tax
Compliance into shared services is normally considered
only when an organization’s existing shared services is
stable and credible. ‘Proof of concept’ is an important
element in convincing the organization that shared services
is ready for the next step. In addition, it normally requires
that certain functional capability is in place such as trial
balance maintenance, month-end close, balance sheet
reconciliations, etc. (it’s pretty hard to maintain the
statutory accounts if you don’t have control over these and
likewise the preparation of a corporate tax return will be
next to impossible). As highlighted in the following
diagram, the adoption of Statutory and Tax Compliance is a
step taken after a number of other steps have been taken
and are in place, working effectively.
A

2. Making the move to shared Services
Typically, the scope of shared services can include some or
all of the following:
• Preparation and filing of the annual statutory accounts
• Corporate tax returns
• Co-ordination of the annual audit
• Preparation and submission of VAT, Sales Taxes and
customs duties
• Preparation and submission of the other statistical
type returns (e.g. EU Intrastat)
In addition, the local Finance Organization retains
responsibility for the final review and, formal signing of
the accounts and returns prior to submission to the
authorities. A key issue which needs to be addressed when
this work is moved to a Shared Services Organization
(SSO), is the loss of local regulatory knowledge from the
execution of the work. In most cases this issue is
addressed by engaging with an Outsourced professional
firm who has a local presence in each of the jurisdictions.
e engagement of a professional firm, for example one of
the main professional accountancy firms, as part of the
solution provides an additional level of comfort to the
local in-country signatories.
ere are a number of variations in how this can be
structured between the SSO, Local Finance and the
Outsourced professional firm. ese can be summarised
broadly into four options:
1. Outsource the preparation of the tax compliance
returns and preparation of the statutory accounts to a
third party professional firm. is relationship is
managed by the SSO who provide all information
required in agreed format to the professional firm.
2. Migrate all tax compliance and statutory reporting to the
SSO. e SSO use a professional firm to provide local
regulatory input to the process design and to review the
statutory accounts and tax returns prior to their
signature by local company officers.
3. A variation of option 1 or 2 where the statutory accounts
and tax returns are signed by senior management in the
SSO who have been appointed as officers of the local
companies.
4. Transition all tax compliance and statutory reporting to
the SSO. Local Finance retains a tax and statutory
specialist to provide local regulatory input to the process
and to review the statutory accounts and tax returns
prior to their signature by local company officers.
e way to determining the right approach for any
organization involves multiple decision criteria and a
thorough understanding of the contextual environment.
What works best for one organization may not be suitable
for another. e trick is to balance the right level of process
expertise with Statutory and Tax expertise and manage
that successfully.
Special Skills: Change management
In Chazey, we have delivered successful solutions over the
past 10 years in companies such as 3COM, Reuters, Oracle
and Travelport. Indeed, the operating models established in
these organizations have been instrumental in setting the
benchmark and template of leading practice not only
within a shared services environment but also with the
professional outsourcers such as E&Y, KPMG, BDO, etc.,
firms who are actively involved in providing third party
services in Statutory and Tax Compliance.

3. In each of the above examples, solution variations evolved
based on specific requirements and landscape (managed
in-house, managed by an expert BPO, or a combination of
both).
However, the challenges across these companies were still
the same – corporate penalty and audit risks from
government and tax authorities can be high; legal
obligations on company representatives can have personal
liability and criminal consequences.
As a result, not only must the solution be robust, it must
also convince the Corporate and local management that
they will not lose control over the risks that they were
managing successfully in the past. is will be the key
challenge for the project - regardless of how good the
operating model is designed – a lot of time will needed to
give the required assurances to impacted stakeholders.
Controllership and Governance
e move to a shared services model, more often than not,
serves to increase overall transparency and control. ere
are many examples of companies uncovering balance
sheet problems such as reconciliation issues between
statutory and management accounts, tax liabilities not
recognized in the balance sheet, availability of enough
substantiated document and other issues of this nature.
A robust governance body keeps a close tab on the
progress made by each team and can help in terms of
prioritizing and allocating resources both in terms of
money and effort at the right times. As they say, the devil
is in the detail, the controllership arm of the governance
body ensures that adequate control steps and checks are
in place for conformance. Examples include baseline pack
creations, issue escalation huddles as part of operating
rhythm, opinion validation, etc.
Key Take-away
e move to a shared services model will increase overall
transparency and control of Statutory and Tax
compliance. When you add the benefits of a more
commercially focused local Finance support, a more
strategically focused Tax resource, and a lower cost base,
then the justification is very compelling – especially for
organizations with a broad geographical footprint. It also
sets the stage for shared services to play THE key role in
Corporate and Business Controllership.
Statutory and Tax compliance is still a relatively new area
of offering for shared services and represents a real and
tangible opportunity to provide a valuable service to the
business and corporate agenda. Nonetheless, it takes
careful consideration to ensure buy-in and support for the
approach.
About Chazey Partners
Chazey Partners is a professional management consultancy
business that is committed to adding significant value to
our clients through a partnership approach. We bring
together a unique wealth of expertise and real life
experience in Business Transformation, Shared Services &
Outsourcing and Technology Enablement. We pride
ourselves in having built, operated and turned around some
of the world's most ground breaking Shared Services
Organizations, and for implementing many highly
successful multi-sourced (shared services and outsourced)
delivery solutions. Our experience covers both Private and
Public Sector, providing expertise in a wide spectrum of
business functions, including Finance, HR, IT and
Procurement.
Visit: www.chazeypartners.com
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David O’Sullivan
Co-Founder
Chazey Partners
Tel: +353 86 384 8573
enquiries@chazeypartners.com
Anirvan Sen
Managing Director
Asia, Middle-East & Africa
Tel: +65 6701 8230/+31 649133170
enquiries@chazeypartners.com

4. ABOUT THE AUTHOR
David O’Sullivan
Co-Founder
Chazey Partners
Tel: +353 86 384 8573
David has over 20 years’ experience at a strategic and operational level in driving business change and transformation with
multinationals in a broad range of industries. He has established and optimized business critical operations, implemented
global ERP applications, and outsourced and offshored other functions. As well as co-founding and building Chazey Partners,
David has held a number of top level roles including COO of a Technology company and Corporate Controller of a global
Consumer Goods company. He has also been at the forefront of leading significant global change with companies such as
Whirlpool and omson Reuters in a number of capacities including Project Director and global Head of Shared Services.
Since the 1990s David has led and driven global business transformation programmes that have realised significant cost,
service and control benefits through the introduction of new operating models in Finance, HR, Procurement, IT and Sales.
David is a Chartered Accountant and graduated from Trinity College, Dublin with a degree in Economics & Political Science.
Anirvan Sen
Managing Director
Asia, Middle-East & Africa
Chazey Partners
Tel: +65 6701 8230/+31 649133170
Anirvan has 20+ years of extensive experience in Technology, LEAN six-sigma, Talent Management, Shared Services, IT and
Sales. Prior to his current role with Chazey Partners, Anirvan has spent 15 years in GE, running the Quality organization for
GE’s EMEA operations of Shared Services, developing global delivery models for BPO vendors, initiating strategy for shared
services in the Middle-East and Africa region.
His expertise covers implementation experience in Western Europe, Eastern Europe, Russia/CIS, Turkey, GCC, North Africa,
Nigeria, Kenya, South Africa, China, India, ASEAN, ANZ, Brazil and US. He is an innovative technology entrepreneur, Business
Excellence and Shared Services Modeling adviser.
Anirvan holds LEAN six-sigma Master black belt and Bachelor of Engineering in Instrumentation and Control Engineering,
and he is an Advisory Board Member for Finance Talent Development Program (ACCA).