All companies should have rules in place to ensure that business operations are followed according to corporate compliance standards. These rules are detailed and deployed into the company by policies. All financial accounting decisions, activities, and plans are done in accordance with a set of procedures that form the basis of the financial policy. Once the financial objectives are confirmed, the next move is to frame policies to guide its further proceedings with the help of financial automation software.
Active policies enable companies to manage data, detect violations, and take appropriate actions. In order for these policies to be effective, they need to be evaluated periodically to ensure that they are still valid. The two main reasons for laying out policy management are:
- To properly govern the financial transactions taking place so that the staff can follow the set procedures and
- To establish strong management practices, as adopted by the organization.
Main components of financial policies are:
- Accountability: The financial systems should be such that it makes the organization more accountable to its stakeholders. As an organization all you should account for all the resources and its expenses. For this, the policy should clearly indicate the procedures for reporting and publication of financial data.
- Transparency: An organization should disclose all its operation and provide necessary information to stakeholders. This means that the organization should provide accurate and timely information to beneficiaries and all relevant stakeholders.
- Integrity: All team-members should follow all rules set by the financial policy. As a compliance team, you should set precedence in following and adhering to all rules.
How can the organization benefit from the policy management?
Financial automation software, like Finly, uses tech to enforce policies and reduce human error. The efficiency gains are especially noticeable in long, detailed, multi-step processes. Finly ensures that tasks are completed on time in a manner that can be controlled and measured. Additionally, automated actions are recorded and documented for auditing purposes.
Consider an Infrastructure/ Construction company which deals with several projects at any given point of time. For each project, the business would be dealing with multiple vendors. In most cases, each item is procured from multiple vendors. Now let’s say there are 50 Projects running in parallel wherein cement is being procured from 20 different vendors. Each project will have its own budget again each vendor & against each item. That is roughly 50*20*1 combinations that need to be tracked by the Finance Team. Think about the plight of the Finance team in managing the whole task of releasing Purchase Orders against these 20 vendors across 50 projects, & tracking spend against each of these pre-allocated budgets allocated. Above this, the Finance team will have multiple other policy violations to take care of.
The dynamic budgeting & real-time insights module in the financial automation software can bring order to this chaos. Configure financial policies & regulations, team-wise, project-wise & budget-wise etc. Enable notifications to monitor any policy violation to track any discrepancies & to assist you in carrying out day to day operations.
Finly’s financial governance suite gives you the power to focus your energy and efforts on activities that add value to your business.
We believe the next generation of Finance teams would not be spending time on manual work carrying out their day to day operations of making vendor payments, reconciling invoices, tracking advances etc. They would be performing critical tasks of analyzing & tracking key metrics relevant to the company’s growth.