For employees, compliance can be a daunting term as it seems to imply firm rules and strict regulations. Yet compliance doesn’t have to negatively impact employee experience. With the right tools, checks and balances, it may even be possible to increase employee satisfaction, all while mitigating the associated risks for organizations.
Protect your organization and employees by clearly understanding what compliance is, in which areas it’s most important, and why staying compliant benefits your organization.
What is Compliance?
In corporate and organizational management, compliance is the process of making sure your organization and employees follow applicable laws, regulations, standards, and ethical practices. In addition to following internal policies, it also means being consistent with state and federal laws.
There are two types of compliance that organizations should be aware of:
- Policy compliance—an internally set goal by an organization in an attempt to encourage and empower employees to follow its own standards and ethical practices.
- Regulatory compliance—an externally set goal by the state or government that organizations are required to achieve in order to comply with relevant laws, policies, and regulations.
Compliance programs help protect your organization’s reputation and prevent it from becoming involved with regulatory fines and lawsuits. On top of ensuring external protection, it also helps lay out your organization’s internal expectations, such as employee behavior, to ensure that your operations run smoothly and that employees are focused on achieving your organization’s goals and mission.
Where Compliance Issues Lurk
When it comes to budget, travel and expense (T&E) is one of the largest costs incurred by companies after payroll and supplier invoices; it is also highly vulnerable to compliance risks.
But while you may think this is due to increasing amounts of employee fraud, waste, and misuse, it can actually be the result of organizations using outdated processes which are impacting their ability to minimize fraud and maximize compliance.
Here are the three most commonly outdated organizational areas where compliance issues lurk:
1. Expense Management
Every organization must face the possibility of fraud and non-compliant spend when it comes to expense management. This is especially true for organizations that still use a manual process, as fraud schemes can work across multiple financial systems and be hard to detect. Still, what you can’t see can cost you, and your organization could be exposing itself to unnecessary risks like reputational and legal ramifications.
Gain more visibility over your entire organization’s expense process by adopting an automated expense management solution. Make it simple for employees to stay compliant with policies, all while speeding up the process of tracking expenses—it’s a two for one kind of deal.
With a connected budget, expense, and audit workflow, your company can start putting the right safeguards in place to increase corporate compliance in areas of fraud detection, including:
- Detect fraud across your organization
- Improve the accuracy and timeliness of spend
- Enforce policy compliance before approving expenses
- Ensure all employees are compliant using independent auditors
2. Invoice Management
Directly linked to an organization’s fiscal health, the accounts payable (AP) process or invoice management, involves collecting the money owed to an organization by its debtors.
It is also a big piece in your financial picture. But what about when your AP process is disrupted by compliance issues? Well, it can be a costly problem.
Insufficient processes, like Excel templates and submitting invoices via email thread, are only causing more stress and errors for AP managers. Common invoice compliance issues, such as late payments to vendors, result in organizations paying increased penalties and interest fees. That’s more money out of your organization’s budget.
An automated invoicing system can solve these pain points. By adopting an automated invoice process, you can facilitate greater compliance of company policies, reduce costs, and gain more control over employee spend. Employees can even submit and monitor invoices any place, anytime—even on the road—which saves a lot of time.
Modernize your invoice management process to:
- Stay on top of spending
- Capture invoices using machine learning
- Eliminate late payments and manage cash outlays
- Streamline purchase requests and automate approvals
When employees are on the go, it’s common for organizations to have rules and guidelines for what employees should or should not spend money on. But it’s also common for employees to forget about these policies once it comes time to travel. Without access to policies on the road, how can your employees be sure that they are staying compliant with your organization? They don’t. Instead, travelers are forced to play the guessing game, only to later be discouraged about traveling when they find out that they were uncompliant.
Unfortunately, this is a common problem as many organizations have the assumption that high compliance means less traveler satisfaction. However, a podcast from the Global Business Travel Association (GBTA) found the opposite. Programs that are more guideline driven and approve of more options make sure that travelers are taken care of. This is true for both the road warriors and occasional travelers. The folks who travel regularly look for such benefits when considering employment, often leaving if they aren’t happy with travel experience. And for those who rarely travel, a travel policy with more guidelines means less pressure on employees to make the wrong decisions or accidentally record the wrong expense, only to later be penalized for being out of compliance.
Take the stress out of traveling and easily guide travelers to make the right decision with an automated travel booking solution.
Why You Should Care
Compliant organizations are more up to date on industry trends and have more streamlined processes, enabling employees to make appropriate decisions. Employee compliance also boosts overall satisfaction, as they have a clear and effective direction by which to achieve their goals.
Compliant organizations also:
- Avoid fines and lawsuits
- Build a positive company reputation
- Achieve higher productivity
Updating your travel and spend management processes to optimize policies can improve your organization’s standardization, increase transparency, and bring your organization more simplicity and speed when it comes to doing what you do best.