The case for legal entity management software has been made time and again, both in these pages and elsewhere, and we can see the impact with the increase in purchases of B2B solutions across the globe. Many in-house compliance and governance professionals, from the legal operations team all the way up to the General Counsel, are starting to see the benefits of entity management software.
It might be, however, that you’re facing an uphill battle in your organization. Do your leaders still insist that Microsoft Excel is good enough for entity management? Are a lot of your processes and reports still being handled manually? Is your entity management just really inefficient and unfit for the 21st century?
The Five Signs for Needing Entity Management Software
To help you build that business case for entity management software and arm yourself with what we hope are the final arguments to get you across the line, here are five signs your organization needs to invest in entity management software:
1) Your version-control process has gotten out of hand
As the structure grows and the number of entities, and teams within entities, balloons, it’s easy to lose control without a robust system and a faultless process. How can you make sure the version of the contract or license you’re looking at is the most up to date, that it hasn’t been changed and stored in another system or just printed out and put in the filing cabinet without being updated on the shared server? How can you make sure that there aren’t two versions of the same important entity data floating around, informing very different strategic business decisions?
When your centrally held data is not reliable, and multiple versions of corporate data are being used around the business, you risk missteps and missed opportunities. Entity management software helps to install a central repository, a single source of truth for entity data, helping you to get the right information to the right people at the right time and ensure tight version control on all documents.
2) You’re finding it difficult to track compliance across different jurisdictions
When people hear, “tracking across jurisdictions,” they often think about those multinational companies trying to stay compliant with very different rules and regulations on opposite sides of the world. But it doesn’t have to be that complicated or diverse – just think of the United States, which is itself made up of 50 different jurisdictions, each with its own company law and regulatory requirements. If your organization has an office in New York and one in California to cover both seaboards, you’re operating in two different jurisdictions despite it being one country.
Regardless of the number of jurisdictions you’re in, it’s important to have tightly controlled entity management processes as soon as a second entity turns a business into a structure – one step wrong in one entity can have knock-on effects to the rest of the group. Spreadsheets or other manual processes run the risk of corrupted data or being unable to accurately compare entities as data is compiled slightly differently. Managing entities in one single system makes tracking and compliance reporting much more streamlined.
3) Your group structure is becoming unwieldy
Another issue with adding subsidiaries to the structure is a risk of things becoming unkempt – that is, entities upon entities with different processes and approaches, all undermining each other.
Being able to create organizational diagrams using entity management software can be the key to making legal entity rationalization programs more efficient; the software creates a real-time picture of the state of all entities along economic, ownership or geographic lines, highlighting gaps or potential issues or conflicts across the whole structure.
4) Your reporting is unreliable
One of the biggest problems with manually derived entity reporting is the risk of human error. If humans input the wrong data, or their finger accidentally slips while inputting numbers and no one notices, then the reports you produce based on that data will be unreliable and erroneous. And when those unreliable reports are being used to make some of the biggest strategic business decisions – or just a simple decision, like whether more headcount is needed – then the resulting decisions will be flawed.
Entity management software can help to give peace of mind that any reports and any decisions made based on entity data are completed using the best and most accurate information possible.
5) You create reports manually
And if all this talk of creating reports has you breaking out in a cold sweat because that’s a manual job at your place, then this could be a strong sign that you need entity management software. Why pore over months’ or years’ worth of data to input into a spreadsheet for analysis when your entity management software could automate a lot of these reporting needs and fulfill them on a regular basis.
Among the benefits of entity management software, it can both improve the efficiency of legal operations through automation and help to protect the integrity of entity data in the first place.
The verdict is in: entity management software can help your organization to grow
It’s not the silver bullet, the one thing that will drive growth across the group, but by deploying entity management software, you are giving your organization the best possible start. The benefits of entity management software include helping to eliminate inefficiencies in your workflows, to mitigate the risk of human error being introduced and to increase the quality of your entity data and reporting output.
Entity management software can also give legal operations departments the time and space to think more proactively about how to best structure the group’s legal entities, and to spot gaps or issues in the structure by producing entity relationship diagrams and organizational charts – both of which can be created at the touch of a button without the need to pore over endless reams of paperwork.
Modern business has outgrown software such as Microsoft Excel. You need to be able to report with accuracy, drilling down to the finer details of your entity management with ease. Diligent Entities can help to enable better working processes in legal operations by providing assurance, expertise and security to the whole compliance team.
Diligent Entities can go where no spreadsheet has gone before. It can store entity information, documents and organizational charts in a highly secure format to create a single source of truth. It can help to manage the ongoing accuracy of the corporate record using compliance calendars, reminders and workflows for better data. It can help to surface the right information to the right people at the right time. In addition, it can help when reporting on governance and compliance requirements, even electronically filing statutory forms into global regulatory bodies. When was the last time a spreadsheet did that for you?
Get in touch and request a demo to see how Diligent Entities can fulfill your entity management software needs, and help elevate your legal operations and compliance processes to the next level.