Blog / Finance January 13, 2022

3 Ways Finance Can Manage Compliance & Mitigate Audit Risk

From market volatility to accelerated digital transformation and the development of remote environments, many conditions are shaping the future of work.

Courtney James

From market volatility to accelerated digital transformation and the development of remote environments, many conditions are shaping the future of work.

From market volatility to accelerated digital transformation and the development of remote environments, many conditions are shaping the future of work. These conditions make managing compliance and streamlining audits a complex and challenging task for finance teams. 

According to Forrester, manual systems and spreadsheets significantly impact risk and compliance. Nearly 50% of companies rely solely on spreadsheets for their auditing and controls, which is necessary for risk and compliance management.

Finance teams can improve process visibility and create a reliable audit trail in three methods: centralize the closing process and data storage, improve the quality of their data, and leverage automation in the accounting department. 

Centralize the closing process and data storage 

A centralized close process is critical for maintaining traceable audit trails. When multiple systems are used throughout the accounts receivable and accounts payable processes, information can become siloed and hard to access. In this instance, the finance team wastes resources to backtrack and find information, prolonging the auditing process. Controlling finance processes in a centralized system connecting to all of the finance team’s business intelligence tools facilitates efficiency and accuracy in document processing. Finance leaders must select systems that support process controls and centralized data storage to help create thorough audit trails.

Centralizing data storage is critical for cross-functional communication and access to real-time information. Manual systems and legacy technology do not prioritize communication features. In remote work environments, having real-time visibility relating to particular jobs or business cases is an urgent need. For enhanced visibility and team collaboration, finance leaders should choose technology solutions that offer real-time reporting dashboards and data analytics to lessen the chance of overlooking details. With enhanced communication and better documentation visibility, the finance team can more easily transfer data to auditors.

Improve the quality of data for decision-making 

All stakeholders within the finance function should be confident in referring to your finance systems as their source of truth. Using the information stored on spreadsheets or any system driven by manual entry can be dangerous for decision-making because those systems are inherently prone to human error. A limitless number of scenarios can result in a piece of inaccurate information, and judgments derived from inaccurate data can have grave consequences. A recent survey shows that 53% of businesses are very concerned with the idea of spreadsheet risk, but only 19% were working to lessen their risk exposure. Meaning there is a large portion of companies making business decisions from data that has a high probability of being inaccurate. 

For finance executives looking to create an agile and proactive finance function, there must be a system that manages data, particularly the reporting for auditors. To enhance data and eliminate error, finance leaders can integrate real-time artificial intelligence into their processes. 

Leverage automation into accounting processes

As finance teams sift through daily tasks and balance competing priorities, preparing for audits can often be an afterthought. By leveraging the latest real-time automation into accounting processes, finance leaders can speed up the financial close process and trust that their records are consistently audit-ready. The latest automation technology improves controls by eliminating the risk of error and wasted spending to make auditing far less complicated. 

Finance leaders can start by working with a technology provider who can offer the benefits of real-time automation like guaranteed ROI, immediate process improvement, and end-to-end visibility. With real-time insight into business spending, finance teams can develop detailed and accurate documentation that reduces the manual labor of preparing for audits and streamlines the process for auditors.
Learn how your organization can start eliminating wasted spend by scheduling a demo with an OpenEnvoy expert today, visit https://openenvoy.com/contact-us/.

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