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Coping with the rising tide of compliance

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23rd Mar 2017
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Early results of AccountingWEB’s Strategic Finance Leader survey have found respondents struggling with what has felt like a small avalanche of new compliance issues.

In short the verdict so far is that government legislation, however well-intentioned, is driving finance leaders to the brink of despair. Answering question 10 in the survey: What factors do you believe will influence your sales figures, 58% of respondents stated that government legislation was a going to be a factor.

For all their best strategic intentions, the finance team seems to be always mired working in the business, not working on it. One respondent to the survey stated that a “pure play strategic finance leader does not exist outside academic text books”.

Whatever the impact of regulations, being a finance leader in today’s business environment means coping with more moving pieces than at any previous point in history. To find out more about how handle this rising tide of compliance, AccountingWEB spoke with two finance leaders to get their views.

You can have your say in the survey by visiting this link (closing date 31 March).

Nives Feely, finance director, Sellick Partnership

“There are always going to be regulations and events finance has to adapt to. Your standard accounting will always change and that’s probably needed. People shouldn’t see it as onerous as it’s generally to ensure accounts remain true and fair.

“It’s the periphery that sits around it that creates extra workload. We’re getting two Budgets this year, and from that comes legislation: this year it’s the apprenticeship levy and gender pay gap reporting from April. A lot of these in an SME will sit with a finance director.

“For us in the recruitment industry from 6 April we have the new IR35 rules for off-payroll workers in the public sector, and making sure that contractors are compliant. That risk has now gone from the individual candidate or contractor across to us as the agency, so that is a big change.

“Keeping up to date with everything and making sure that you don’t miss one piece of legislation, from a reputational risk perspective for a company or an individual can be difficult, regardless of whether you’re at an SME or a FTSE company.

“The SME FD has to put policies and processes in place to ensure everything works smoothly and these sorts of things don’t take away from day-to-day running of the business.

“The first thing is to understand the changes, then it’s looking at how we can work with them, then it’s about communication. This is always key, whether that’s with suppliers or customers or internally, and making sure everyone understands what’s happening.

“With the IR35 changes a blog was written that went live on our website, and we wrote to anyone who was going to be affected and all of our clients, whether or not they were affected at the time or otherwise, just to make sure. Our staff are fully briefed so that if somebody phones they’re able to comment, and we set up our own dedicated email address so people have one place to go for all queries.

“For us it’s about keeping lines of communication open, and keeping people updated with what’s happening.”

Ian Smith, finance director and general manager, Invu

“We all like to have a moan about compliance, but being compliant with the law is often the minimum. Most people are morally compliant at a higher level, but if you’re always trying to ride the boundary of the law then you are going to complain about compliance changes more frequently.

“Small businesses must be really frustrated with elements of the compliance requirements that actually may not be applicable. Something like auto enrolment wasn’t an issue for us as everyone is a full-time employee, but I imagine for a new business it’s a completely new ball game.

“Large companies have a structure to deal with all this. The compliance legislation has them more in mind when it’s written, but then it impacts on some poor business with two part-time employees.

“There is generally a move towards putting more teeth on regulations on things like data security, spam or payment practices.

“The big thing at the moment seems to be security. It’s something people are concerned about. That mostly relates to the data protection side, but obviously is broader than that. An ICO fine or a security breech is more of a reputation problem than the fine itself. But even though high fine levels aren’t around at the moment it doesn’t mean you have to wait until next year to put in preventative action, but the bar keeps rising all the time on things like cyber security.

“I find tools like Twitter and LinkedIn really good at raising things people are concerned about and discussing best practice. They’re educational tools now, if you use them correctly”.

You can take the AccountingWEB Strategic Finance Leader survey until the end of March by clicking on this link. *Edit - survey now closed*

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