An effective financial strategy seamlessly embeds accurate and timely accounting within an insurance company’s regulatory compliance structure. An integrated approach requires a foundation designed with this end result in mind. Building an execution model within your organization empowers your team and achieves your strategic goals.
What’s Needed for Effective Accounting Programs
An effective insurance organization’s accounting program requires professionals with STAT and GAAP understanding, expertise, and knowledge of insurance operations. The knowledge needed to perform the accounting basics takes years to develop for a comprehensive understanding.
Attracting and retaining the right people with industry expertise is a challenge, yet crucial for ensuring that accounting functions meet the requirements for recording and reporting in a timely and accurate compliance program.
Effective execution must incorporate the requisite compliance needs within the accounting and process controls to ensure the company adequately covers its requirements.
Ultimately, embedding processes and controls establishes more confidence in accounting and reporting.
The Convergence of Accounting and Compliance
Getting the accounting right is paramount but knowing how it intersects with compliance is key to effective execution.
Once you have the appropriately reported balances, you must understand how to accumulate and report that information for compliance. An organization can seamlessly account for and report for the operations meeting the regulatory and business objectives efficiently with proper planning.
Creating an Effective Accounting and Compliance Program
Begin with the end reporting and strategic requirements in mind when setting up an effective program.
Many current processes were designed years ago based on legacy systems and needs. Legacy systems developed years ago in different business, and regulatory environments increase risks today in a far different business landscape.
Many processes have been modified over time to meet new demands, often overcomplicating the process and workflow until all understanding has been lost. Companies suffer when they must apply considerable resources while struggling to perform outdated tasks.
This dysfunction could be relieved with system or process updates that incorporate accounting processes with today’s compliance drivers.
Specific Questions to Focus On
- How does accounting data flow into compliance reporting documents?
- Are there tasks that can be redesigned to be part of the initial process development?
- Have the regulation requirements been reviewed lately to ensure we understand the data flow from the accounting systems to required reporting?
- How do we align the accounting and reporting information with the company’s strategic needs and information communication?
Asking these questions routinely allows you to prioritize updating your processes to ensure effective and efficient tasks are embedded within your operations.
How We Partner for Improved Accounting
At TAC4 we assist companies in performing system selection, business process redesign, and compliance reporting. We provide experienced staff for assistance and guidance, allowing your team to redirect their energies to executing corporate strategies. Contact us to setup an initial consultation.