1. ©2013 Volt. All rights reserved. Proprietary & Confidential. Centralised vs. decentralised F&A support to international recruitment businesses Stephen Hill Finance Director

2. A thought to start... If I could offer you only one tip for the future, sunscreen would be it. The long term benefits of sunscreen have been proved by scientists whereas the rest of my advice has no basis more reliable than my own meandering experience… Mary Schmich

3. What do we include in F&A support? Front Office Middle Office Back Office Sales & Marketing Commercial negotiation Recruitment Contracts Timesheet processing Contractor payments/payroll Client billing Credit control/collection Management accounting Statutory accounting Tax HR Facilities management IT

4. Sales & Marketing Commercial negotiation Recruitment Contracts Timesheet processing Contractor payments/payroll Client billing Credit control/collection Management accounting Statutory accounting Tax HR Facilities management IT What do we include in F&A support? Front Office Middle Office Back Office

5. What ways can we operate Middle and Back Office? Centralised (shared services) vs. decentralised? Maintain centrally controlled functions vs. assigning responsibility to local representatives In-house vs. outsource? In-house core competence/expertise and preference vs. outsource specialist providers

6. The Matrix Centralised/Shared Services Decentralised

7. The Matrix - Continued Centralised/Shared Services: Outsource Decentralised: Outsource Centralised/Shared Services: Inhouse Decentralised: Inhouse

8. What are the factors which determine the best approach?

9. Determining Factors  Small size of local operation Large  Centralised/Shared Services: Outsource Decentralised: Outsource Centralised/Shared Services: Inhouse Decentralised: Inhouse

10. Size of local business Economy of scale/critical mass at a particular stage in the organisations development SLAs, processing cycles and organisational cover for key functions Segregation of duties and internal controls

11. Determining Factors Centralised/Shared Services: Outsource Decentralised: Outsource Centralised/Shared Services: Inhouse Decentralised: Inhouse  Small complexity of local operation Large 

12. Complexity of local business Degree of standardized process and business model across the various international businesses ‘Local’ customers and contractors vs. international customers and contractors operating in this country

13. Determining Factors   Centralised/Shared Services: Outsource Decentralised: Outsource Centralised/Shared Services: Inhouse Decentralised: Inhouse More Suitability of outsource service provider or system Less

14. Suitability of outsource service providers/systems ‘Turnkey’ operation that meets your needs in some/all markets Availability of integrated timesheet/billing/payment systems in some/all markets Attitude to outsourcing of client/contractor facing functions (middle office)

15. Determining Factors Centralised/Shared Services: Outsource Decentralised: Outsource Centralised/Shared Services: Inhouse Decentralised: Inhouse infrastructure technology

16. Infrastructure technology Historically infrastructure technology limited options - favoured a centralised/inhouse approach Progress in broadband, web access, cloud computing More of an enabler to organise the way you want

17. Determining Factors   Centralised/Shared Services: Outsource Decentralised: Outsource Centralised/Shared Services: Inhouse Decentralised: Inhouse More Core competence in function Less

18. Core competences Know what you can do yourself and where you need to rely on others in international markets Applies particularly to local payroll/employment law, tax (payroll, VAT, corporation tax) and statutory accounting Do you need protection i.e. sunscreen? Qualify local supplier(s) of these services early on in the process of establishing a presence in an international market

19. The Matrix - Revisited Centralised/Shared Services: Outsource Decentralised: Outsource Centralised/Shared Services: Inhouse Decentralised: Inhouse TIMESHEET PROCESSING CLIENT BILLING CONTRACTOR PAYMENTS MANAGEMENT ACCOUNTING CREDIT CONTROL / COLLECTIONS LOCAL CONTRACTOR PAYROLL STATUTORY ACCOUNTS TAX

20. Summary and conclusions Understand your local market and scale of operation Identify your strengths and weaknesses and preferred operating models Reassess models periodically - your business and the market will change Don’t forget the sunscreen!

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