7 Approaches to Ensure All Entities Comply With Your Reporting Requirements
Posted by Sjoerd-Jaap Westra
You have a responsibility to your corporation to meet all regulatory reporting requirements, but staying in compliance can be complicated when you're working with multiple entities. Various accounting practices are often used, which typically means you need more time and staff to consolidate your reporting and ensure all regulations are met for each entity.
Instead of falling out of compliance or spending too much time and resources on regulatory reporting, you can use these seven approaches to keep all entities in compliance.
1. Standardize Reporting Requirements
Level the reporting playing field with all entities by standardizing your reporting requirements. When all entities understand their reporting obligations and expectations, you cut down on the amount of time you spend contacting entities to get the information you need.
If every entity uses the same ERP or accounting solution, you can build these reporting requirements into the system's exporting options. One way to handle multiple accounting practices is mapping data to particular fields when you export or import them.
2. Streamline Data Consolidation
Another helpful approach for meeting reporting requirements is consolidating your accounting and reporting data. When you bring all the data together, you can use systems with consolidation logic to reconcile all accounts. This practice reduces the amount of manual input and checking required when you bring multiple data sources available, allowing you to address any accounting practices being used within your organization.
3. Incorporate Compliance Controls Built Into Your ERP
Instead of sifting through a lot of financial data that doesn't meet your reporting needs, you can use your ERP to create compliance rules for all reporting entities. Everyone can continue using the accounting practices they prefer, but the data provided has to meet specific reporting requirements before it is passed on for reports and other uses. The ERP can handle this automatically, so you reduce the amount of hands-on time you spend going through the data.
4. Adjust to New Compliance Requirements
How long does it take for your corporation to adhere to new regulatory requirements? Manually updating systems or expecting people to remember it when they report financial information can lead to major compliance issues.
Use a system that automatically adjusts to new compliance requirements so you don't run into any problems bringing everyone up to speed. Ideally, this system can handle regulatory updates and system-wide requirement changes without a problem, so you limit your manual updating. In most cases, you only need to update the rules just once instead of once for every entity.
5. Check Data Accuracy
You need multiple ways to confirm the financial data you receive is accurate. Ideally, the system handles most errors before the information is inputted into the system. For the data that may sneak through your existing controls, use auditing features, compliance checks, and visual reports to determine any issues with the accounting information you're working with.
A few wrong numbers here and there can add up to significant problems within your corporation, but you don't have unlimited resources to throw at the problem. With the right system, you cut down on the amount of staff you need to double-check all of the information, allowing you to use your resources as efficiently as possible.
6. Work From a Unified Ledger
A unified ledger eliminates many compliance problems, since everyone is working from the same data set. You don't end up with duplicated data, inaccurate data from multiple entities, or accounting practices that aren't already accounted for in the system.
A consolidation system can unify all of your financial information throughout your corporation, which also eliminates the time you spend tracking down accounting sheets and other vital data you need to maintain compliance. A system such as Unit4 Performance Management makes it easy to pull consolidated data from a particular department, product or business area.
7. Automate Key Functions
How much time do you spend manually inputting and checking financial data for your reporting requirements? If the data is already in the system, you waste time and introduce human error by re-entering the data.
Look for ways to automate key functions so you can direct your attention to areas that often have problems with compliance, instead of spending your resources on data entry and administrative tasks. Some automation areas you can explore include creating data import templates to meet your reporting requirements, checking imported data for inaccuracies, duplication and other errors, and getting built-in support for multiple accounting practices. When you maximize your business process automation, you improve your productivity and free up your time for other essential regulatory reporting duties.
You need to maintain regulatory reporting requirements no matter how many entities or accounting practices you encounter within your corporation. Instead of bringing on more staff or sinking additional resources into handling your financial data, you can use smart systems that help you meet your reporting requirements, even when these requirements change. Unified ledgers, multiple data accuracy checks, and built-in compliance controls let you focus on the duties requiring your direct input, instead of taking up all your time on processes that should be automated.