Say ‘yeah’ to using technology for trade-credit compliance

As a Credit Manager, trade-credit compliance is a key part of your role. You must ensure that your team and processes comply with all relevant laws and regulations. This can be a lot of work, but it’s essential to protecting your business. While compliance is a critical part of any credit management function, keeping up with all the compliance and legal requirements can be challenging. Many stakeholders view compliance’s associated costs and constraints as barriers to embracing new opportunities. Let’s face it, compliance professionals are often viewed as innovation killers.

The bitter pill to swallow is, if things do go wrong, it could well be you that shoulders the blame for compliance requirements. How do you support an innovation agenda while also upholding compliance requirements? Here are 4 common tasks associated with compliance with ideas on how innovation can help you gain visibility and maintain control.

Task 1. Understand the compliance requirements for credit managers and keep up to date with changes in the law

Understanding trade-credit compliance and legal requirements are crucial for protecting businesses and individuals. Changes in the law can happen rapidly, and it is vital to stay up to date to avoid penalties. Failing to do so can result in fines, reputation damage, and business loss.

The Old Way

There are a number of ways to stay up to date with changes in the law, including subscribing to legal newsletters and following relevant blogs.

It is also important to develop a network of contacts who can provide information and advice on compliance issues.

There are many resources available for you to pay attention to and ensure you don’t miss out on anything important.

This is incredibly time consuming and difficult to maintain.

The New Way

Your vendors need to stay informed and remain compliant. Much of what is needed in compliance change is neatly packed and wrapped in the credit automation software solution you are using.

Compliance automation helps businesses stay up to date with changes in the law and if you need to implement new procedures off the back of a change, it’s often about a transformational shift from “good” to “best practice” instead of it being focussed on just risk reduction with not much commercial gain.

Read more about the benefits of trade-credit automation here.

---

Task 2. Educate your team and stakeholders on compliance and legal requirements

Trade-credit compliance can be a complex and ever-changing area, so it’s important to educate your team and stakeholders on the latest requirements.

The Old Way

You should hold regular training sessions. These could be internal sessions, or you could hire an external trainer to run the sessions for you. You will also need to distribute updated information.

And remember to assign someone to keep track of who has participated in the training, been assessed and passed – and has not.

Taking these steps can help your business stay compliant with the law and avoid potential problems down the road.

This is resource intensive and doesn’t provide a consistent source of education.

The New Way

Have you ever received an email from your software solutions provider about upcoming compliance changes and requirements? Or a notification pop-up when you log in? Or a support article provided to you on the compliance change and how this will impact you.

Yep, that’s software taking care of education for you. Compliance automation educates team members on how credit management works under GDPR and other regulatory frameworks.

Here’s an example: Remember the legislative change on e-signatures earlier this year? We at 1Centre sent multiple notifications to our users to communicate and educate them on the changes.

We were doing the heavy lifting on compliance, so our customers didn’t need to.

---

Task 3. Audit your processes regularly to ensure compliance

You don’t want to risk being fined or having forced external audits because you weren’t following the latest rules. By auditing your processes, you can identify areas that need to be updated to comply with the latest legal requirements. A robust audit process can help you anticipate and prepare for future trade-credit compliance changes, making your organisation more agile and responsive.

The Old Way

It would be best if you audited your finance processes regularly. The purpose of the audit is to ensure that your finance processes are adequate and effective. Frequently review your procedures and document any changes.

Furthermore, an independent external auditor should conduct the audit. This will ensure that the audit is objective and impartial. After the audit, the auditor will prepare a report detailing their findings.

This report should be reviewed by management, and appropriate action should be taken to address any shortcomings that have been identified. This will help you to identify any weaknesses in your processes and make changes to improve them.

Audits are never fun. That’s because it’s an event, and not a continuous agile stream of improvement.

The New Way

Automation creates one simplified way to monitor regulatory compliance and policy status. For example, compliance automation can track and report the completion of activities per your service level agreements (SLAs) and for regulatory requirements.

It aggregates data from multiple sources and provides an audit trail via the activity log. This helps achieve efficiency, enhances regulatory reporting, eliminates compliance risks and allows compliance management to receive real-time quality data and reports. It also streamlines activities and incorporates cybersecurity throughout the process. It is excellent for companies that need to secure their sensitive data and improve risk assessment capabilities to strengthen day-to-day operations.

---

Task 4. Regularly communicate with stakeholder sand customers about compliance and legal requirements.

Trade-credit compliance can be a complex and ever-changing landscape -that’s why keeping clients and other stakeholders up-to-date on compliance issues is so important.

The Old Way

Seek input from compliance experts. When crafting communications about compliance, consult with subject matter experts to ensure accuracy and clarity.

Be timely. Make sure you share information about compliance changes as soon as possible. Rather than waiting for stakeholders to ask questions, provide regular updates on compliance risks and developments.

Encourage feedback. Stakeholders should feel comfortable voicing their concerns about compliance issues. Encourage open dialogue by creating a safe space for honest feedback.

When you take the lead on communications, you are accountable too for misinformation or delays.

The New Way

Your automation platform can help by facilitating the communications necessary to run a compliant organisation – for all involved.

Distribution of compliance content and updates happens naturally. Utilising a platform with a built-in communications suite allows you to email communication directly from the platform without you lifting a finger.

Depending on the sophistication of the platform, stakeholder groups will be segmented. For example, your Credit Team might be one user group, your Sales team may be another, and your Customers a third. Accordingly, triggering targeted compliance communications to these stakeholder groups is a sinch.

It then tracks engagement like who has opened or clicked, making logging communication records fast and easy.

---

If you’re looking for ways to improve compliance management – and have an appetite for innovation – consider using compliance automation.

An effective compliance programme should be designed to protect the company’s shareholders by creating key systems and controls to make sure that the company complies with all laws and regulations wherever it operates.

Why try to keep up with compliance requirements when you can lean into technology to take care of it?

Automation increases efficiency and effectiveness. Automated technologies allow a finite credit management team to cope effectively with compliance changes.

It can document relevant procedures and give you the data you need to reveal behavioural patterns that can better focus your efforts. With automation, compliance programmes can identify trends much more granularly because technology is much better at comparative analysis than people.

Moreover, automation can help track and monitor compliance with all legal requirements and contractual obligations and facilitate training and communication of key messages at different levels.

As a result, it will help you save time and resources while ensuring that you remain compliant with all applicable laws and regulations.