CFOs worldwide keeping a close eye on the accounts all know the following: Since the COVID-19 pandemic, compliance costs have rocketed. And the numbers back this statement up. Global regulatory compliance expenses shot up by $33 billion from 2019 to 2020 (totalling $213.9 billion). Since then, the numbers have continued rising.
So wouldn't it be great if solutions that slash the cost of regulatory compliance existed?
Well, here is the good news. If your organization is a SAP ERP or S/4HANA user, the incredible advancements in regulation technology (RegTech) now mean compliance costs can be significantly cut through controls automation in SAP.
But as this VOQUZ Labs guide will reveal, internal controls automation not only decreases regulatory compliance spending - but also delivers additional benefits to compliance processes that you can quickly bring into your organization.
Before we dive into why controls automation and regulatory compliance are perfect partners, this overview guide will be insightful for readers unfamiliar with the internal controls automation revolution.
In a nutshell, organizations worldwide are making the shift from manual internal controls processes to automated ones. Why? Because it significantly boosts a company's bottom line by cutting fraud and errors (a huge problem that costs businesses 5% of revenues on average).
Automating internal controls also helps businesses improve, strengthen, and streamline their regulatory compliance obligations.
In the following sections, we will reveal all the benefits.
We already mentioned that reduced costs are one of the greatest upsides controls automation within SAP brings to your regulatory compliance processes. But you may be wondering how the cost savings are realized.
To explain this, let's look at the principal strength of automated internal controls software: real-time monitoring and automated checks. And how does this work?
In essence, automated checks conducted in real-time can immediately flag potential compliance issues (and, even worse, violations) as they occur.
For example, remQ Business Inspector software is an SAP add-on that can perform this bottom-line boosting process for your organization.
And imagine what that means. No more waiting for manual audits - conducted by highly-paid, pricey professionals - to discover instances of compliance violations months, perhaps more than a year, after the event. It also means hefty fines levied by regulatory enforces are avoided.
And in a nutshell, identifying compliance problems far sooner prevents them from snowballing into expensive disasters for an organization.
Recommended reading from the blog: To learn more about how internal controls automation can save your organization money (and become a CFO's new best friend), the following VOQUZ Labs guide will be insightful.
Our White Paper explains how using robust controls and automation, organizations can better manage fraud risks, comply with regulations, improve operational efficiency, and save substantial costs.
The next way controls automation software in SAP can bolster your regulatory compliance processes is by making them more accurate and efficient. But let's remind ourselves why accuracy and efficiency in compliance are decisive.
And this is the reality: Your business or organization either complies with regulations, such as anti-money laundering (AML) and counter-terrorist financing (CTF) laws - or it doesn't comply. And if there is a grey area, leaving it to a regulatory body to decide how hard to throw the book at you is a high-risk strategy.
After all, the fallout can be highly damaging. For example, regarding AML regulations, fines globally surged 50% in 2022. And in 2023, companies like Microsoft, British American Tobacco, and Deutsche Bank have all already received penalties totaling billions of dollars for regulatory non-compliance violations.
And the bottom line is this: To mitigate the risk of astronomical financial penalties for non-compliance (as well as a PR and reputational nightmare for your organization and its stakeholders), anything that vastly improves the accuracy and efficiency of your compliance processes - such as controls automation - must be embraced.
Now that we understand the value of creating more accurate and efficient compliance processes through controls automation, you may wonder how this works within a SAP ERP or S/4HANA environment.
Firstly, it's important to remember that any solution worth its salt, such as remQ Business Inspector (an add-on for SAP), should be highly customizable with user-friendly no-code tools.
And what does this mean tangibly?
For example, in the case of remQ, you can easily add custom controls to target the data relevant to regulatory compliance obligations unique to your business. But what happens next? remQ gets to work continuously monitoring for errors with automated red-flag alerts telling you when an issue (like a potential compliance violation) needs a closer look.
Controls automation software for SAP can also improve and ensure compliance accuracy by offering out-of-the-box tools with quick setup times - meaning something all CFOs love is possible: An immediate ROI.
In the case of remQ, more than 100 pre-built controls - developed through years of collaborating with customers are ready after the installation.
Organizations are increasingly exposed to compliance requirements. Adopting innovative ways to assess and manage risk and enhance performance is critical. That’s where data analytics and continuous monitoring are helping to simplify and improve the internal control system, increase operational efficiencies, reduce costs, and detect fraud and errors earlier. Internal controls become a way for organizations to create value.
In the previous section, we discussed pre-built controls and customizability. But all effective controls automation software for SAP ERP or S/4HANA should also offer solutions for the common regulatory compliance obligations, such as:
Payroll Compliance: remQ's continuous monitoring alerts users of unusual transactions, hiring dates, and changes to remuneration - plus many more - significantly contributing to a company's payroll compliance obligations (depending on the jurisdiction).
Sanctions Compliance: Complying with sanctions, such as those set by the US Office of Foreign Assets Control (OFAC), the UN, and the European Union, is also highly effective within the remQ platform (through a best-in-class global sanctions database API).
Access Violation Management Compliance: Laws such as the Sarbanes-Oxley Act (SOX) and similar laws worldwide require organizations to implement robust access violation management processes - including proper segregation of duties (SoD). remQ's digital 4-eyes concept helps businesses comply.
This guide revealed vital insights regarding how companies and organizations that use SAP can bolster their regulatory compliance efforts by embracing controls automation software.
Although the topic and the technology are complex - setting up the software is easy! In fact, remQ takes less than a day to install. To learn more about how to get started and receive answers to your questions, please contact us.
VOQUZ Labs remQ Business Inspector software is best-in-class automated internal controls software that operates as an SAP add-on with a library of 100+ pre-built shipped controls ready to run. You can click here to learn more about how remQ can assist your business with its goals to reduce fraud, cut audit errors, and stay compliant within your SAP ERP or S/4HANA environment.
Paul is a RegTech content writer & strategist with extensive experience in digital marketing and journalism. His work has appeared in the Guardian newspaper. He also holds a degree in International Relations, where he studied global sanctions compliance and cross-border finance.
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