Spend Management: Some Industries Struggle with SOX Requirements
A decade later, the shadow of Sarbanes-Oxley stretches across industries as C-level executives continuously work to meet the standards put into place by it and other federal regulations. While the business community has balked at some of the requirements due to the expense of implementing the tools needed to meet reporting and oversight policies, the general consensus is that Sarbanes-Oxley compliance has significantly reduced fraud, enhanced spend management, bolstered investor confidence and, less fortunately, placed a massive strain on CFOs due to reporting requirements.
A 2011 report about the state of the insurance industry indicates that CFOs have little time to assist in actually running their companies due to being so overwhelmed by regulations. Business Finance recently reported on the study’s results, quoting insurance professional Wayne Locke as saying, “You look at the insurance industry right now and it’s highly regulated. You have gap reporting, internal manager’s reporting, plus regulatory requirements. There’s no time for any kind of analysis or to look for trends.” To make matters worse, the article goes on to report that 87% of respondents rely on manual spreadsheets for data collection and reporting, a disaster waiting to happen in terms of the potential for human error, fraud and slow processing.
Though some companies are reportedly struggling with regulatory overload, there is assistance to be found. Recently, the JOBS Act was passed to help alleviate some of the reporting stress from new businesses, extending the amount of time they have until they must shore up their internal controls and comply with the stricter Sarbanes-Oxley compliance provisions. Additionally, spend management software and other applications are widely available to help refine and simplify the reporting process, improve visibility and real-time data access, and drastically reduce the chance of manual error.
These days, those “errors” tend to end up making the sort of headlines no company wants. If your own compliance efforts have been a bit lackluster, now might be a good time to check out some of the applications that can do the heavy lifting for you.