The Sarbanes-Oxley Act (SOX) deadline is looming and soon accuracy, timeliness, completeness, and transparency of financial reports will be essential requirements for publicly traded companies in the U.S.
Even though SOX is largely a financial and accounting driven initiative, it does present great opportunities to get IT projects funded. Planned carefully, SOX projects can also deliver strategic impact to the business by optimizing existing business processes or structuring new processes for competitive advantage.
Section 404 of SOX requires auditors to attest to the underlying controls and processes companies use to derive financial results. For companies that market and sell their products through indirect channels, SOX is a tremendous challenge, and puts the CEOs and CFOs of those companies at greater risk.
Companies that utilize channel partners have many different types of transactions, including cooperative marketing funds claims, special pricing and quotations requests, consignment inventory, rebates, returns and warranty claims — many more than in a direct selling model.
In addition, these channels partners often have different types of compensation plans including spiffs, commissions and volume incentive rebates. All of these transactions must be documented and certified for the appropriate level of control. Companies who don’t manage these transaction processes are not only at risk for SOX non-compliance, but also for working capital shrinkage, fraud, and overall inefficiency in their selling processes.
However, by investing in the proper solution to manage multi-channel environments, companies can meet regulatory requirements for business processes, as well as reduce costs and increase revenues.
Utilizing PRM Solutions
Process automation technology — also commonly referred to as partner relationship management (PRM), channel relationship management (CRM), e-business, or sell-side e-commerce — helps companies achieve SOX compliance by enabling them to profile their partners, serve partner-specific content to them, and automate all transactions.
By automating financial transactions with configurable workflow and advanced reporting, companies can deliver better business value to partners, as well as meet regulatory requirements.