Financial governance and compliance: why is it so important?

By Andrew Pearson, SME Product Manager

What is financial compliance?

Although the details of financial compliance can seem complicated, the idea behind it is simple – it’s about following the rules.

At its most extreme, it’s making sure there’s no fraud in your business, you’re not evading tax and you’re not a vehicle for money-laundering.

But the benefits of financial compliance are not just about showing the authorities that you’re not up to anything shady. Having the right policies in place can give you peace of mind, too.

When it comes to making sure you are financially compliant, you’ll find it easier to manage if you already practise good financial governance.

So, what is financial governance?

Again, the concept of financial governance is straightforward. It relates to how your business manages its financial information. It includes how you monitor cashflow, look after data and stay on top of the information you are required to disclose.

You need to know what information you should have, be able to monitor and retrieve it when you need it, and be able to analyse and present your finances easily when necessary.

Having the right processes in place can take a lot of the pain out of financial governance.

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