How to Navigate Compliance Challenges with NetSuite ERP Systems

Having compliance nightmares in your business?

You are not alone, and one of the biggest challenges organizations face is not being able to juggle between different regulations from one jurisdiction to another. In fact…

Many organizations get it wrong

Manual compliance is not only costly, but it is prone to errors. The traditional way to stay compliant is not working; here is where NetSuite ERP comes into the picture.

What you'll discover:

• Why Compliance Gets More Difficult Each Year
• The Hidden Costs of Compliance Shortcomings
• NetSuite ERP Compliance Features that Make All the Difference
• Compliance Strategies That Truly Work
• Constructing a Sustainable Compliance Program

Why Compliance Gets More Difficult Each Year

The reality is that the compliance environment is changing every day. New regulations are emerging, and the ones we already have are becoming more sophisticated.

But do you know the worst part?

From research, 49% of businesses have compliance management difficulties within their ERP systems; in other words, almost half of all businesses struggle with something that is supposedly a simple process.

Think about it for a moment, your enterprise spreads across different locations and jurisdictions that deal with different currencies. These entities might be different depending on your jurisdiction and generally have separate tax codes, including:

• Financial reporting rules
• Data protection rules
• Industry-specific rules
• Tax requirements

Not to mention the fines and penalties for non-compliance are becoming more severe year by year.

Here are some other things that make it difficult.

Manual compliance seems like a never-ending game of whack-a-mole. You feel like you have the process nailed down, and a new rule pops up. Most businesses are still using spreadsheets and outdated legacy systems that are not built to handle real-time changes.

What it leads to?

The compliance process becomes reactive instead of proactive.

The Hidden Costs of Compliance Shortcomings

Don't feel offended, but here is something you do not want to hear…

Non-compliance is enough to take you out of business.

A good amount of companies, 70% to 80%, have failed ERP implementation, and lack of proper compliance management is one of the critical reasons. When a business cannot properly track and manage its regulatory obligations, it is doomed to fail.

But here is the catch…

Non-compliance issues cost you:

• Legal and monetary fines that might amount to millions of dollars.
• Lost business opportunities due to the loss of business reputation.
• Operational inefficiency that can come to a complete halt.
• Executive and leadership risks, including personal fines.
• Audit costs that continue to happen every year.

However, most of these compliance shortcomings are completely avoidable by having the right system in place.

NetSuite ERP Compliance Features that Make All the Difference

This is the moment when oracle netsuite features come into play and become your compliance solutions.

Oracle NetSuite is not like any other ERP; it has been designed to withstand the sophisticated compliance-related challenges and provides a custom solution for every jurisdiction it gets.

What is that special about NetSuite as compared to other legacy ERPs? Let’s show you…

Legacy software solutions considered compliance an afterthought. The compliance and regulatory capabilities were considered add-ons to be thought of later after the system was in place. As a result, the ERP integration gaps, disconnects, and disharmonious features.

NetSuite, on the other hand, has built-in compliance capabilities from its creation.

What does it mean?

The financials, the operational functions, and the compliance requirements work in hand.

Here are a few key features that set it apart from the rest:

Built-in Audit Trail

Meaning, every transaction or event, no matter the modification and change is tracked. No more digging during an audit season to find some documents that prove you are doing everything the right way.

NetSuite is the system where:

• Configuration changes,
• Master data change,
• User access is watched,
• Details of financial transactions.

Multi-Currency, Multi-Entity, Multi-Tax Rule Support

Operating in different states, provinces, or countries? Oracle NetSuite has got you covered.

The system will:

• Automatically convert currencies in real-time.
• Apply the correct tax rate by the tax jurisdiction
• Create separate reports by jurisdiction.
• Keep a separate book for every entity.

Automated Compliance Reporting

Stop the manual report preparation and don't waste time; NetSuite will generate compliance reports automatically based on the set criteria.

The reports that are ready to be made include:

• SOX-related reporting documentation.
• Financial consolidation reports.
• Tax filing summaries,
• Regulatory submission reports.

Compliance Strategies That Truly Work

Ready to take the compliance to a whole new level?

Here’s the strategy for compliance solutions that separates the winners from the "compliance challenge" businesses.

Strategy 1: Implement Role-Based Access Controls

The reality is that not everyone needs access to everything. NetSuite allows you to create tiered access permissions so that people only see what they need to see and nothing else.

This will help with:

• Data security and compliance requirements.
• Segregation of duties.
• Fraud prevention.
• Audit trails.

Strategy 2: Automate Compliance Workflows

Manual processes are where everything breaks down in the compliance space. Automation is the key. NetSuite's workflow automation will ensure key compliance steps never get missed.

The list is never-ending but can include:

• Approval processes for large-volume and high-value transactions
• Compliance training reminders
• Document retention policies
• Risk assessment processes

Strategy 3: Leverage Real-Time Monitoring

Waiting for the end of the year to figure out what went wrong is not the solution. NetSuite offers a real-time monitoring feature that will track anything out of the ordinary and pin-point problems before they can become costly issues.

The best things to monitor are:

• Transaction abnormalities
• Policy violations.
• Access control
• Data quality problems.

Strategy 4: Create Compliance Dashboards

If the information is hard to find, most likely, it will not be used. NetSuite dashboards will keep all the critical metrics regarding compliance issues right at your fingertips.

What is even better?

Dashboards can be updated in real-time. You will not have to wait for the month-end or the end of the year reporting to see how things look like. You can see compliance problems as soon as they arise.

Consider tracking the following KPIs:

• Audit readiness scores
• Compliance training completion rates
• Exception policy frequency
• Level of risk exposures

Constructing a Sustainable Compliance Program

Fun fact: what most companies get wrong with compliance is that they build the solution for today's needs and forget to prepare for future requirements.

Smart businesses, however, create solutions with a flexible mindset from day one.

This includes:

Scalable Architecture

NetSuite can grow with your business. When you move into new geographies or acquire new entities, your compliance process will easily accommodate the change

Regular Updates and Patches

Compliance requirements are changing almost by the minute. Since NetSuite is cloud-based, you will always have the latest and updated features to deal with new compliance requirements.

Integration Capabilities

Your compliance should not work in a silo, NetSuite can integrate with any specialist compliance tool you may need down the line.

Training and Change Management

75% of organizations see improvement of compliance as compared to the traditional processes, only when they actually use it.

Meaning, invest in:

• Employee user training
• Change management processes
• Continuing training and education process
• Monitoring employee performance.

Wrapping Up

Compliance related challenges are not going anywhere. If you ask me, they are only becoming more intricate year by year.

Nonetheless, if you have the right NetSuite compliance-related ERP features in place, you can not only turn this challenge around but leverage on compliance issues to set yourself apart from your competition.

The ones that get it right, will dominate the industry, and those who get it wrong will be stuck cleaning up after audits, paying fines, and coming up with reports of shortcoming to the shareholders.

Here are some important things to remember:

• Automated compliance workflows should be built from day one
• Real-time monitoring of your business data is crucial to mitigate risk.
• Dashboard metrics need to be put in place and easy to find.
• Access permissions matter, creating role-based controls is essential.
• Training and change management matters.

Stop letting compliance issues get the best of you. Start investing in a system that is going to turn regulatory needs and challenges into business opportunities.