Many companies will look to IT and software solutions to help them comply with the Sarbanes-Oxley Act of 2002 (SOX) and improve their internal controls and reporting. Enterprise software applications can certainly help organizations document their internal controls, remove manual processes, and achieve greater visibility to their financial and operational data.

By implementing integrated solutions that ease the flow of information from the front office to the back office and by leveraging analytics and business intelligence applications, organizations are finding that software is a key component of compliance. This article will touch on just a few of the ways in which enterprise applications can help with compliance and improve internal control.

Improved Financial Reporting
Organizations are under increased pressure to file accurate financial results faster than in the past. The SOX Act has shortened the window for reporting financial results and upped the ante for reporting accurate results. Many companies are still using spreadsheets for management reporting. While spreadsheets may be providing an adequate solution today, as the deadlines shrink and controls become more stringent, spreadsheets will no longer be a viable solution.

Enterprise applications can help organizations meet these shortened deadlines in a variety of ways—from consolidating financial information to providing drill-down, drill-across access from financial reports to transactional detail. Having the ability to rapidly consolidate financial information is critical for businesses.

Supply Chain Visibility
Reporting and visibility requirements affect more than just financial reporting. Full compliance with SOX places a heightened importance on supply chain visibility. Companies need to have visibility to understand and report on items such as purchasing commitments for materials, assets acquired by a supplier on a company’s behalf, minimum volume guarantees to vendors, and contractual commitments to forecasts and orders.

To effectively report on these types of commitments and transactions, operations and finance will be required to work together more closely. Again, an integrated solution that incorporates supply chain functions with traditional ERP capabilities will enable increased visibility to this information.

Better Expense Management
Expense management solutions such as strategic sourcing, e-procurement, and project management can all help a company improve internal control. These applications help a company improve visibility, communication, and control while reducing risk. Improving expense management and the controls around it can not only help an organization with SOX compliance, but can also result in significant savings.

Timely Visibility of Changes
Many of the requirements for SOX involve accelerated disclosure of information to external entities. This requires companies to have better visibility of changes than they had in the past. Business intelligence and enterprise performance management solutions will play a key role in keeping management abreast of changes in their business. Having solutions in place that can help you monitor your business will be critical as a company seeks to be in full compliance with the Act.

For More Information
To download a white paper on the Sarbanes-Oxley Act of 2002, click here now.