Filed Your 10-K? 4 Must-dos to Smoothen Your Compliance this Year

by Vineet Kandoi | April 1, 2016

While Honolulu was getting listed as one of the world’s most traffic-ridden cities and the Presidential race was gathering steam, you were possibly holed up in your office, buried in numbers, fighting hard to meet your 10-K deadline!

After weeks of painstaking effort, it’s done at last. You can stretch those limbs and finally catch some sun. The March deadline for filing 10-Ks is now behind us and it’s time to relax a little. With spring making an appearance, you can finally enjoy a well-deserved breather.

But, this respite can also be used for planning your next year’s financial close and compliance calendar to drive efficiency and optimum performance. So, here’s a quick to-do list to help you kick-start your new compliance year; a little something to help make your compliance more smart, consistent and accurate.

1. Strengthen your Systems:

While compliance reporting might seem like a 2 week affair at the end of the year, you know well enough that it is actually a series of steps done correctly and consistently throughout the year. It is the culmination of ledger preparations and journal entries for the entire year and that’s hardly something you can fix at the year end when a deadline is looming large. So get a head start - Set up solid best practices and communication protocols involving all the stakeholders that contribute to the annual filing document – right from the accountants, to the reviewers and the auditors. Some steps could be as simple as creating templates for regularly used reports, setting up ways to review documents and having a method to manage document versions so that the team isn’t scrambling at the last minute.

2. Automate, Automate and Automate:

Minimize manual efforts wherever you can. The human mind is tuned for greater things like analysis, auditing and catching mistakes. But when you are working with a lot of numbers, it’s easy to get bogged down with the details and miss out on these. You tend to overlook trends, fail to link similar data across the entire document and end up making mistakes that might seem silly, but can cost the company dearly. Adding automation to your existing financial close will empower you to prepare error-free reports. With the right tools at hand, your team can also focus on more business critical analysis, without the added pressure of comparing and editing numbers manually.

3. Prepare a calendar:  

One thing that can really help ease your compliance process is a nifty calendar. A compliance calendar gives you a continuous reminder of what you need to focus on at different times in the year. A compliance professional’s life can be very busy, and a calendar is just the thing you need to help structure your priorities and keep your task list current and relevant. Create an annual calendar for you and the team with important deadlines such as tax filing dates, SEC filing deadlines, monthly/quarterly report cut-off dates, audit committee meeting dates etc. and share it with all the stakeholders. A clear picture on deliverables for the month will help everyone prepare well ahead of time.

4. Document and Share Learnings:

Now that the filing is behind you, I am sure there must have been several points in the process where you felt like things weren’t working well or that the current methods could have been tweaked for better efficiency. With things still fresh in your mind, this is a good time to reflect, take stock and document your learnings. This will help you plan and strategize for the coming year. Once the team has had a chance to get some air, have a brainstorming session to share your learnings and hear from the others as well. Ask questions, listen to suggestions, fine tune processes where required and then document it all. Some suggested questions to ask:

1.        Are we involving everyone we need to from the start of the process?
2.        Is everyone aware of the filing schedule for the year? And how much in advance are they starting to work on their individual pieces?
3.        Are all the required documents available in a common repository? Does everyone have access to them?
4.        Who is the back-up for team members owning critical parts of the process?

Questions like these will help you identify process gaps and bring everyone on the same page and I cannot emphasize how useful that is when working with something as critical as your compliance filing.

All in all, you’ve put in a hard month or two of work and this is the time to relax a wee bit and rejuvenate. But it’s also a great time to reflect on the learnings and plan a better filing process for the upcoming year. I hope that by doing some of the things I have suggested, you can plan ahead and have a smarter and smoother compliance reporting process going forward.