Why Regulatory Compliance Is Non-Negotiable for F&A Teams

Compliance and control lie at the heart of F&A functions. Even though they can be a headache to keep up with, F&A leaders must maintain strict compliance with evolving regulations despite the expanding roles and new expectations from stakeholders.

The stakes are high: errors in compliance can lead to severe repercussions, including legal actions, financial losses, business disruptions, and reputational damage. The increased individual accountability in today's regulatory environment makes non-compliance a corporate and personal concern.

• Legal Risks: Regulatory or legal actions could result in fines, penalties, imprisonment, product seizures, or debarment.

• Financial Risks: Non-compliance can negatively impact an organization’s bottom line, share price, potential future earnings, and investor confidence.

• Business Risks: Events such as embargos or plant shutdowns could significantly disrupt operations.

• Reputational Risks: Non-compliance can damage an organization’s reputation or brand, leading to bad press, loss of customer trust, or decreased employee morale.

Traditional compliance processes are typically manual, fragmented, and ad-hoc, requiring significant effort to manage across various systems, business units, and locations. Maintaining compliance with standards like the Sarbanes-Oxley Act (SOX), IFRS, IAS, GAAP, GLoBE, and BEPS has become increasingly complex, introducing higher compliance risks.

The regulatory compliance landscape is becoming more challenging, and non-compliance costs are rising. Emerging topics such as Environmental, Social, and Governance (ESG) issues underscore the importance of compliance, with evidence suggesting that better ESG scores can translate to about a 10% lower cost of capital.

On top of that, risks in areas like cybersecurity and clawbacks carry significant consequences for individuals and organizations, further pressuring the F&A function.

Thomson Reuters highlights the increasing complexity of regulatory legislation and diverse risks, emphasizing that firms must ensure no risks fall through the cracks. So, while compliance has always been a priority for F&A leaders, adhering to evolving regulations is more challenging than ever.

BlackLine offers comprehensive solutions—Financial Close, Intercompany, and Invoice-to-Cash—to help F&A teams focus on what matters most. By reducing manual effort, embedding leading practices, and shifting processes from reactive to preventive, BlackLine enhances compliance and control.

• Unifying Data and Elevating Controls: BlackLine seamlessly imports information from other systems, defines and manages account groupings, and easily maps general ledger accounts to balance sheet and income statement line items. This unification of data enhances controls and ensures accuracy across the board.

• Centralizing Documentation and Enhancing Visibility: By centralizing all supporting documentation and explanations, BlackLine provides real-time visibility into compliance status, incomplete items, and other key performance indicators. Purpose-built dashboards and reports enable stakeholders to access tasks, projects, and supporting documents, promoting audit efficiency and providing a single source of truth.

• Increasing Efficiency and Freeing Critical F&A Resources: BlackLine eliminates time wasted on manual workflows, allowing F&A teams to focus on more strategic, value-adding activities. This shift from reactive to preventive processes strengthens key controls and enables more timely business insights, aligning resources with high-priority tasks.

• Standardizing Processes and Enabling Timely Analysis: Replacing error-prone processes with standardized, proactive approaches enhances compliance and allows for more timely business analysis. This proactive stance helps organizations stay ahead of regulatory changes and maintain robust internal controls.
  
  

To effectively address financial regulatory compliance, organizations must foster a culture of continuous learning and develop technology evangelists who champion the use of technology within F&A operations. This approach ensures that teams are always updated with the latest regulatory requirements and best practices.

BlackLine’s technology enables a real-time, touchless, one-day financial close, strengthens controls, and promotes continuous improvement. By building a data foundation that provides accurate, up-to-date financial information, teams can focus on strategic advisory roles and predictive analytics – and worry less about regulatory compliances.

By automating routine tasks, BlackLine frees up F&A resources to focus on higher-value activities. This strategic realignment allows teams to concentrate on maintaining compliance, supporting business decisions with accurate financial data, and driving organizational growth.

Regulatory compliance for financial institutions is a critical priority, especially in an era of expanding F&A roles and increasing regulatory complexity. Non-compliance carries significant risks, but leveraging financial regulatory compliance software like BlackLine’s technology solutions can help organizations maintain robust compliance and control frameworks. By unifying data, centralizing documentation, increasing efficiency, and fostering continuous learning, F&A teams can confidently navigate the evolving regulatory landscape and drive long-term value for their organizations.