In the wake of the Enron scandal, the government has cracked down severely on publicly traded companies. The Sarbanes-Oxley Act came into being in 2002 and has been giving CEO’s and CFO’s nightmares ever since. The crackdown not only forces companies to come up with internal controls to ensure accurate data but also provides grounds for criminal charges if compliance is not kept.
Maintaining NetSuite compliance is an important role for any business. And it falls mostly on the competence of the NetSuite administrators. It’s usually one of many responsibilities that a NetSuite administrator could be responsible for, in fact. (Its no secret that NetSuite administrators are overburdened. You can read our article on how to alleviate overburdened NetSuite administrators here.) However, with respect to compliance, even though Sarbanes-Oxley has raised the stakes on companies, NetSuite is a great tool to have to make sure you stay out of trouble.
Considering what is at stake, here are three things every NetSuite User should know about Sarbanes-Oxley.
1. The Responsibility is on you!
Well, not just you as a CEO or an admin, but your company as a whole. Sarbanes-Oxley is explicitly clear about who is responsible for the accuracy of the financial data your company releases. Most of it falls on the executive officers, but the company is responsible for implementing the internal controls that ensure compliance. So a NetSuite Administrator, with access/control of all the financial records and transactions the company makes, becomes a big player in this game! The CEO has to sign his name on these financial statements, however if something were to come back as inaccurate or falsified you and your CEO could be out of a job or worse.
2. Organization is Key to NetSuite Compliance
Just like all tax-related endeavors in life, the key to Sarbanes-Oxley compliance is keeping your documents and financial information organized! NetSuite goes a long way to helping you with this. Having a searchable database of your financial history and real-time reports available to auditors will give your greater control and increased transparency during the auditing process.
You may find that even with NetSuite’s database keeping track of all the records and transactions can still be a challenge. You may want to consider using a Change Management System to keep your records up-to-date. One we implement and support for our clients is StrongPoint. Change management systems can automatically document changes made to workflows and other business processes which increases transparency and makes compliance that much easier.
3. You’ll need a plan!
Achieving Sarbanes-Oxley compliance is not something you can do on accident or halfheartedly. And just because you have a business management application implemented does not mean you are automatically compliant. You will need a plan to achieve NetSuite compliance.
Auditing firms recommend a five-step plan to achieving compliance. NetSuite has generously provided a sample plan as well as other useful information that you can find here. You may find your company has different requirements that the sample does not address. Still, using this sample as a guideline will give you great insight on what is required to keep and maintain NetSuite compliance!
Understanding your responsibilities with regards to compliance to new regulation is half the battle. You will need to organize your NetSuite account and other business systems for maximum effect. A plan will go a long way to helping you achieve your end-goal of compliance and rid you of any federal penalties or jail time for your employees.
Your NetSuite administrators are your front-line of defense for NetSuite compliance and they must take this responsibility seriously. This problem is a common one for many business and even other NetSuite users, so it is also important to look around for any tools that can help you organize, plan, and stay compliant to every letter of the law.
I hope you found this article on NetSuite compliance useful. There many ways to damage your businesses reputation but not many quicker than compliance and other illegal monetary charges and penalties. If you want to learn more about NetSuite compliance please shoot us a message we would be glad to help! And if you enjoyed the read, please subscribe to our blog to receive more free content!