This article provides information about how Business Central empowers companies to streamline business processes while consistently and cost-effectively complying with increasing regulation and reporting requirements.
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Accounting processes and controls to aid compliance
Companies face increasing financial accounting challenges each year. Depending on industry, markets, geographic location, and finance needs, an organization may be subject to local generally accepted accounting principles (GAAP) and one or more of:
- The Sarbanes-Oxley Act (SOX), a U.S. law passed in 2002 to help protect investors by improving the accuracy and reliability of corporate disclosures.
- The International Financial Reporting Standards section of the European Union's International Accounting Standards (IAS/IFRS), which went into effect in 2005 and sets forth international accounting standards for recognition, measurement, consolidation, and reporting.
- Basel II: The New Basel Capital Accord, enacted in 2004 to address issues of financial institution risk and to promote greater stability in the overall financial system.
Enhance people practices with technology
Compliance depends not only on accurate information and appropriate accounting processes, but also on the people who set up and administer those processes. An effective business management solution can facilitate compliance by helping manage valid and accessible information through transparent processes set up in compliance with industry and regulatory standards.
Realize the benefits of an integrated business management solution
Business Central delivers real-time, integrated operational and financial information from across your organization, so you can:
- Track financial data using custom financial reports for cash flow, revenue, balance sheets, fixed assets, capital structure, key performance indicators, and more.
- Help safeguard accuracy with role-based security and configurable application controls that prevent invalid or duplicate data entry.
- Quickly and easily generate financial reports in accordance with applicable regulatory standards.
- Maintain comprehensive audit trails with drill-down and drill-around functionality and change logs.
Gain control of critical information, processes, and reports
Business Central improves control of key functions and information critical to the successful financial operation of your business.
Manage compliance to the standards that matter
Integrated information, aligned processes, and easy-to-use tools help your people meet financial management expectations and standards that matter to your specific business.
Tailor financial reports to your needs
- Define the structure of your company's chart of accounts based on business requirements and applicable regulatory standards.
- Create accounts and handle complex processes related to a range of business activities, including inventory valuation, foreign currencies, segment reporting, and departures from local GAAPs.
- Control the level of detail for each recorded transaction and select detailed registration for specific types of transactions, such as fixed assets and accounts payable.
- Tailor scheduled calculations and displays for financial reporting, or export the information to Microsoft Excel for further analysis.
Improve information validity
- Configure data fields to accept only information in the correct format, such as the correct number of decimal places or alphanumeric patterns.
- Help ensure information is complete with application controls such as requiring a vendor invoice number to be entered before a purchase order can be posted.
- Reduce the risk of inaccurate information or tampering and help protect sensitive information with access based on job role.
- Prohibit access, provide read-only access, or enable full-access users to add, edit, or delete information.
- Easily identify and resolve discrepancies using a reconciliation feature that retrieves current bank account and transaction information and compares it to general ledger posts.
- Schedule manual or automatic backups to help protect information from electronic failures.
Comply quickly with discovery requests and reporting demands
- Save time when creating standard reports that use common business parameters and criteria to satisfy typical reporting needs, ranging from order summaries to aging accounts receivable.
- Perform complex reviews with basic or advanced business analytics functionality.
- Create custom reports with both built-in tools and the integration with Microsoft Power BI.
Help ensure clear audit trails
- Trace documents and information both forward and backward through the system, from the original source to final financial statements and back.
- Identify how, when, and by whom information was entered or edited, and to what account financial entries have been posted.
- Look up database changes, including previous and revised data, in the solution's change log.
- Increase audit trail transparency and usability, and speed information access for third-party auditors with drill-down, look-up, filtering, register, and navigation features.
Compliance and local functionality
Microsoft builds localized versions of Business Central for a limited number of markets. These localizations primarily focus on regulatory features in the tax and financial areas but can sometimes involve other parts of the solution. If you want to see what is built in Microsoft's localized versions of Business Central, see Local Functionality in the menu on this website and choose a country. Learn more at Local Functionality.
Sarbanes-Oxley: Validating Data and Processes
The Sarbanes-Oxley Act establishes standards for all U.S. public company boards, management, and public accounting firms, including evaluation and disclosure of the adequacy of the company's internal financial reporting controls. Documenting and testing critical manual and automated controls represents a huge commitment of time and resources for companies. Business Central is especially suited for subsidiaries of larger organizations, and can help support small to mid-sized businesses in complying with Sarbanes-Oxley.
IAS/IFRS: Recognition and Measurement Standards
Depending on the current local GAAPs, one of the major recognition and measurement changes for IAS/IFRS is the extended use of fair-value principles instead of historical cost. Business Central can help companies calculate fair value and net present value (NPV) concepts, which are focused on current and expected cash flow streams rather than historical purchase price. On the reporting side, it can provide segment reporting by business unit and geographical location.
Basel II: Implications for Reporting and Analysis
Basel II, developed by the Bank for International Settlements, helps ensure safety and security in the financial system in three key areas: minimum capital requirements, supervisory review process, and market discipline. Although the accord applies to financial institutions and does not target small and mid-sized businesses, Basel II may have some implications for these organizations in reporting and analysis.
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