The importance of compliance to the organization
One of the biggest challenges facing a company is ensuring transparency and conformity of employee activities to applicable rules, i.e. compliance.
What are the functions of compliance in a company?
- Control function – carrying out periodic checks to verify that the procedures and principles adopted by the company are being applied
- Evidence function – collecting documentation constituting evidence of the operation of the compliance system in the company
Compliance is an important element of employee travel and expense processes because purchase decisions (spending company funds) are often made by employees and are not subject to detailed control. On the other hand, decisions regarding services or consumer spending (e.g. meetings with customers in restaurants) are open to financial abuse.
Expanding the traditional understanding of the concept of compliance, we can assume that it it refers to the way in which a company is organized and all the measures it takes to ensure compliance with legal provisions and non-legal standards.
A properly constructed compliance management system not only detects irregularities in the functioning of the enterprise, but also prevents them. The Mindento application has been designed to meet these requirements in the T&E area.
At the same time, the compliance management system should be continously improved and all employees, partners, contractors and managers should be awareof the relevant procedures and be able to apply them in practice.
Areas covered by the compliance management system
The areas that should be covered by the compliance management system depend primarily on the subject matter of the company’s activities. For most companies this will be:
- Liability related to keeping books according to the local accounting acts and fiscal codes
- Tax law – proper organization of the information flow process and updating in accordance with changes in regulations
- Liability related to labour law based on the Labour Code
- Liability related to corruption
- Employees’ conduct compliant with the principles adopted by the company
The growing importance of compliance
Due to a significant increase in legal regulations and their interconnections, one can observe a significant increase in the importance of compliance.
It is also important to improve the training of managers and, as a result, to increase their awareness of their responsibilities. The need for preventive measures to protect the company against fraud and abuse by employees is increasingly recognized. The concept of compliance is gaining importance not only in the financial sector of large companies, but also in small and medium-sized enterprises (SMEs).
The implementation of an effective compliance system should be a standard today, reflecting respect for ethical principles in business and a coherent vision of a reliable and honest company.
How does the Mindento application help CFOs ensure compliance?
- Expense pre-approval
- Requires providing required information for a given type of expenses, e.g. entertainment and participation in meetings
- Prevents multiple claims for the same expense
- Provides transparent data that is easy to analyse
- Ensures compliance with legal requirements for business travel
