Recent changes to financial regulations have created complex rules for financial industry compliance. Sarbanes-Oxley and other legislation have made those throughout the industry nervous. A fine line between company confidentiality and transparency must be walked, and one of the most confusing areas is related to corporate gift limits. Companies of all sizes are left to wonder if financial compliance solutions are possible without alienating clients.
What are Corporate Gifts?
Corporate gifts are small value items provided to customers or vendors. Reasons for giving these items include appreciation for a job well done, gratitude for past business, marketing, or recognizing an accomplishment or holiday. Most companies impose their own corporate gift limits in order to avoid conflicts of interest or fraud.
What Does Compliance Have to Do with Gifts?
In the past, audits and regulators found gifts of large monetary value often influenced business decisions. For example, a procurement VP in a major corporation might ensure a vendor receives the contract for certain supplies in exchange for favors and gifts from the vendor. These acts can lead to unfair business practices, and can also decrease profitability for companies.
How Does a Company Enforce Compliance?
The first step to enforcing rules about corporate gifts is to develop a consistent policy. All team members should be educated regarding the parameters deemed appropriate when accepting gifts. Often, team members without this education will accept inappropriate gifts without realizing the impact. Those in a customer service role may also give inappropriately in an attempt to build a relationship with new clients.
Compliance software is available to help companies track corporate gift-giving and receiving. Software which links to and monitors expense reports for all employees can flag non-compliant entertainment or gifts. Companies can discover fraudulent activity by reviewing these reports, and can also provide coaching to team members who abuse policies with innocent intent. Some software also allows employees to enter gifts received. All companies should require team members to report any gift, no matter how small. By reporting all gifts, employees create a transparency that makes it harder for fraudulent activity to occur.
Without the ability to educate, report, and monitor corporate gift activity, it is impossible for a company to maintain financial compliance solutions.
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