Having a complete risk strategy program requires your organization to integrate multiple groups within your finance and accounting operations.
What exactly is an integrated risk strategy?
A best-in-class integrated risk strategy means connecting the three lines of defense within your finance department:
- Finance Operations Teams
- Compliance Teams
- Internal Audit Teams
Many organizations have their teams conduct varying degrees of audits. Some do it monthly, others semi-annually or ad hoc. It exists as periodic checks by siloed groups.
How can you adopt it?
Implementing a spend management platform enhances communication between the three lines by creating a single view of risk, allowing you to monitor 100% of spend that manual, ad hoc reviews can’t provide.
The platform also provides faster identification and resolution of risk during the pre-payment process, preventing financial loss of non-reimbursable expenses or duplicate invoices, for example.
Additionally, patterns of organizational spend data are created and provide financial leaders with a complete view of employee and vendor behavior across all expense reports, purchase card transactions, and invoices.
What short and long term results are achieved?
Improve compliance: Almost immediately, the platform identifies the riskiest and highest dollar impact transactions, allowing auditors to focus on employees and vendors that can provide the largest operational efficiency gains.
Update company spend management policies: Utilizing data-driven insights from the patterns identified, finance can adjust spending limits, approval processes, required documentation, or reimbursement procedures.
Keep the vendor master clean: Constantly analyzing the vendor master guards against data entry errors, unusual banking changes, ghost vendors, and maintains a healthy relationship between your employees and vendors.
We have even more insight on how to put this in place at your company and how one of our clients is benefiting from implementing their own strategy.
Read the full article here
