As your property management grows in terms of portfolio size, staff, or revenue, it is increasingly important to have the right protocols in place, especially within the accounting department to ensure that every transaction, task, and process is done consistently and securely. Organizations with data monitoring controls in place had 54% less loss than other organizations and more than 50% faster detection time. Internal controls and compliance protocols regulate workplace transactions and avoid internal errors by minimizing the risk of fraud by maintaining data integrity as well as user accountability.
81% of organizations leverage external audits and 73.7% leverage an internal audit to facilitate compliance and weed out fraud. Audits can help retrospectively evaluate what processes need to be implemented, 61% of North American companies say that they are most likely to use the results of internal audits or investigations to determine compliance policies and procedures. Audit trails with name, date, location, and time enhance staff accountability because they know that they are being associated with every transaction they process.
User controls help with compliance by restricting specific tools or areas of your property management software so only departments or users need to use it have access. This means that accounting staff are the only users who should be able to add journal entries or payment processing. Further, if these responsibilities are assigned specifically to individual users, then the users who can alter these permissions should also be limited.
According to Deloitte, 38% of internal audit departments believe that employee training would be effective in detecting and preventing fraud. Using human instinct in combination with the right training and knowledge of when to be suspicious of a transaction, can help to identify invalid transactions early or a non-complying entry. Without strategic training, it’s easy for people to overlook differences when working with similar numbers or images repeatedly.
No two property management companies are exactly the same, but it’s useful to consider how your direct competitors fair under pressure or scrutiny to help your organization avoid the same mistakes. However, when surveyed by Ropes & Gray, more than 50% of businesses said they were unlikely to use the lessons of their competitors to build their compliance program.
Welcoming input from everyone from senior management down to administrators can help curate results that are tailored to your organization, but according to a Ropes & Gray survey, only 9% of companies said they would prioritize employee feedback and 50% of businesses said that it was the least likely approach they would adopt when determining controls and compliance procedures. Having an open dialogue with employees can lead to more effective controls that are easier to navigate based on the user experience since employees are the users encountering controls most often.
To ensure your compliance program is effective after implementing, assess effectiveness to determine its value. Consider the challenges employees report and keep a watchful eye on how transactions progress from a compliance standpoint and adjust your approach slowly. Perfect controls or compliance don’t exist since risk is always evolving, which means that protocols defending your accounting department must also evolve.