4 Tips for Keeping Cost of Compliance Low
The cost of compliance adds up. In fact, according to one study by Deloitte, operating costs spent on compliance have increased by over 60% compared to spending levels before the financial crisis of 2007.
Still, there are ways to minimize the cost of compliance. Most significantly, teams are revisiting the technology they use for SOX compliance.
With resources limited and regulations not likely to let up any time soon, what can teams do to reduce compliance costs? Here are some actionable tactics to consider to help you save on those costs, whether they are actual expenses or intangibles like employee workload.
Four tips for reducing the cost of compliance
1. Think about the future
Compliance is not a sunk cost. With the right people, processes, and technology, compliance programs can have tangible returns by saving money and eliminating hidden costs in the future.
Recent regulatory change sets the new minimum of customer expectations, putting publicly traded companies in the spotlight. Maintaining a forward-looking perspective, where compliance is an investment, can help you navigate the murky waters of risk and compliance.
2. Embed compliance in your day-to-day
When compliance is a part of your organization's everyday work, there are fewer surprises. It's that simple.
Unfortunately, surprises can often be expensive. Having to change course means lost hours, potentially new expenses to mitigate newfound risks, and more.
Eliminate the risk of having to make sudden changes by empowering managers to implement programs built on the company's ethics. In doing so, this grants more responsibility to the manager, and employees are encouraged to implement processes with the support of their managers.
A top-down approach, where senior management supports strong policies, creates a trickle-down effect on the company's ethics, policies, and compliance that can't be matched from the bottom up.
3. Push for collaboration
Maximizing efficiency is different for every organization, but always shares similar traits. Namely, collaboration should be at the forefront of organizational structure.
To assist with this, create clear roles within your team. Break down silos. Use technology to help teams collaborate within the organization. Cross-functional teams that communicate well can significantly reduce the cost of compliance—according to one study, the cost of poor communication has hit an overwhelming $37 billion across the United States and United Kingdom.
4. Use the right compliance technology
Using a collaborative cloud technology—especially one that is purpose-built for compliance teams—cuts time and costs in several areas. You can resolve multiple challenges at once, including:
- Managing and reporting on compliance risk
- Reducing process inefficiencies and better managing time and resources
- Accurately handling and analyzing data and limiting human error
- Enabling a compliance team to turn from check-the-box compliance to value-added work
- Aligning business strategy and focusing on ROI
The cost of inaction
Failing to integrate these best practices and technology into a compliance program creates room for error that can result in more unexpected costs. Here are just a few examples:
- Data entry error: When manually entering data, one wrong click can create several issues, especially if the mistake goes unnoticed. However, modern compliance technology is capable of connecting narrative and data, ultimately limiting human error. Without this automation, more time will go into manual data entry and multiple reviews to ensure data is correct.
- Inaccurate data: Inaccurate data can have an exponential negative effect throughout reports. If the data is inaccurate, finding the source of the issue and correcting all that follows can be a time-consuming—and potentially reputation damaging—process.
- Siloed work: When you are wrapped up in your team's compliance work for long periods of time, it can be difficult to get a grasp of the larger picture. Technology can help smash these silos.
- Treat your compliance programs as an investment in preventing future unexpected costs
- Identify technologies built to reduce costs of compliance
- Empower employees to implement compliance in their day-to-day business
- Create clear roles for employees and promote collaboration
Workiva can help you empower your team and transform SOX compliance. Request your demo now.