At the core of all financial reconciliations, compliance procedures exist to help you produce the most accurate financial statements possible. 

From pre-close to post-close, each task should be tracked so you know you have a holistic close that’s done correctly. Not adhering to compliance procedures can leave your organization in a financial bind and legal trouble. Having visibility into the status of every financial close activity is crucial to the success of your business, especially now.

The Challenges of Maintaining Financial Compliance

There are a lot of businesses that don’t put enough importance on their month-end close processes. They rely on the memory and experience of their team, carrying no documentation of their reconciliation processes. Of course, if key team members leave without passing on that knowledge, they have to recreate the process from scratch. 

• In some industries, such as banking, daily reconciliations are a critical part of the job. 
• For others, such as retail and food services who are experiencing volume increases, they’ve transitioned from weekly reconciliations to daily as well so they have better insight into their finances. 

This means taking time out of every day to follow workflow processes to balance the books and account for every dollar.

Lack of Financial Compliance Procedures? You May Be Losing Revenue

With the pandemic shiting the way we buy, people are spending less time in brick-and-mortar businesses. Instead, they’re ordering online and having things delivered.

In fact, as of June 2020, food delivery app users increased from 36.4 million in 2019 to 45.6 million in 2020. 

That’s an increase of 25.2% and the year isn’t over yet.

The increase in food delivery and retail delivery services has fundamentally changed the way businesses operate. 

• 1:1 matching has become increasingly rarer.
• Businesses have to factor in new fees for delivery and marketing.
• Credit card transactions have increased exponentially while cash has dropped.
• New payout options have increased transaction volumes.

These factors have made it much more difficult to match every transaction forcing companies to write off unknown losses and expenses simply because they don’t have the time to research or reconcile it. 

Maintaining SOX Compliance, All The Time

Increased online sales have also caused issues within inventory supply chains. Companies with a strong brick-and-mortar presence typically put less emphasis on their online sales.

Now, they’re scrambling to pull inventory from physical stores rather than build new warehouses and distribution centers to process online orders. If the inventory isn’t tracked accurately, this can cause huge problems at month-end close. 

For businesses concerned with maintaining SOX compliance, these disruptions have proved especially challenging to the risk assessment process. In fact, while spring is the traditional start of SOX risk assessment, COVID is pushing us toward real-time, dynamic assessments, rather than a single, annual one. 

Each one of these challenges puts strain on attempts to maintain compliance. No matter the size of your company, the external rules and internal controls that make up your compliance are there to safeguard you, your employees, and your business. 

Maintaining Compliance through the Miracle of Automation

To help maintain compliance, Adra by Trintech creates an automated workflow that reduces the chance of errors and mistakes and protects you from being penalized by regulatory bodies.  

With a manual reconciliation process, you don’t know when your team is done with their tasks until you ask. Until then, you have no visibility into their workflow or how efficiently they’re completing their tasks. Adra consolidates the entire process in-app so you can track it step-by-step.

Step Right Up to a Standardized Approach to Month End Close

Adra Task Manager allows you to set up audit criteria and guidelines, creating templates for dependency-based checklists, ensuring each task is completed. This allows you to check your tasks off as you work through the close process and gives you better control over your workflow. 

By automating low-risk, repetitive tasks with Adra Balancer, you reduce the risk of human error and free up your team to focus on more important tasks like properly documenting your reconciliations for compliance.

When transaction volume increases due to new payment options offered to customers, Adra Matcher can be reconfigured to accept the new files and formats so you can import new data formats to reconcile new transaction types more accurately.

The Adra Suite also cuts down on unnecessary email chains and meetings by providing in-system communication tools like:

• Reminders.
• Email notifications.
• @Mentions.

These tools give you the ability to assign tasks to specific team members so you can prioritize what needs to be done and they can maintain accountability.

A Peek Into The “New Normal” of Maintaining Compliance During Financial Close

As we continue to navigate the new reality of compliance in the era of COVID, additional rules and regulations may come up. Adra gives you the flexibility to put those new controls in place so you and your team can stay compliant no matter what new changes come about in extreme circumstances like a global pandemic. 

If you’re ready to see how Adra can help you maintain your compliance in your ever-evolving market, drop us a note to schedule a demo.