• 10 mins read
  • By Adiran Mathew

Document Compliance – What / Why / How?

What is document compliance?

There are processes where documents are generated and/or collected in the form of a mandatory set of documents required for a specific purpose e.g. a business loan process, an employee joining a company, legal documents kit. In all these processes, there are some documents that are collected and some are generated by the process owners. However, together these documents that serve a particular process are called a document set, like an employee file, a loan file/kit etc. Most of the documents in these kits are mandatory for the process while some are optional. For any such kit or file, if all mandatory documents are present in the file, then the file is declared to be complete or compliant, whereas in cases where some documents are missing, the file is declared to be incomplete or non-compliant. So, document compliance is a process to check whether the file/kit created as a part of any process is complete vis-à-vis a checklist (part of the process definition) or not complete. Document compliance may be a requirement for new cases/files as well as for old files for functions like audits.

What are the challenges in managing document compliance?

Most of the traditional businesses run business processes with physical documents and it’s very difficult to compute and maintain document compliance with physical papers. It’s a manual process and has a dependency on a human being running the process. Moreover, the bigger risk with physical papers is that once you declare a file complete and later remove a paper/document from it, then it stays incomplete from a compliance perspective but nobody has the knowledge of it. This means that checking compliance for a physical file is not a one-time job and has to be repeated regularly to ensure that the file stays complete forever.

Many times, compliance a file also has documents that have expiry dates and in case documents expire then such a file needs to be declared incomplete and a new valid document needs to be inserted in the file. E.g. let’s assume a file requires a copy of the passport as a mandatory document. Now, when the passport expires, then new copy needs to be stored in the file. When files are managed physically, this becomes a tedious task.

Another challenge is the exception approvals. Many times, exception approval is given for a document with an assumption that the document will be added to the file in the next “N” days – how to maintain that process, who to remind and how to collect documents within “N” days and declare the file incomplete in case the document is not added within “N” days, becomes a task and can sometimes lead to non-compliance.

Auditing a physical file is another tedious activity. Going through each page requires a high level of skill to recognize documents and then compute compliances. Moreover, physical file audits require the physical file to be available with the auditor and for a big organization it’s an expensive activity as either the auditor has to travel to the location of the file or the file has to travel to the location of the auditor.

Compliance checklist can be conditional as well, e.g. a particular document should be available only for a particular profile of the process e.g. let’s say, a certificate of incorporation for a company is required only when the applicant is a private limited or public limited company and may not be required in case the applicant is a proprietor. Such requirements at times may be very complex to remember and manage.

There are endless compliance challenges that need a solution!

Kleeto introduces an automated solution for all your compliance worries!

Solutions to most of these problems lie in the digital space. Document management should be done digitally, which means, document collection, generation and maintenance should all be digital. Need of the hour is to have a software / technology-driven compliance engine which manages the process of computing compliance (any number of times), manages the complexity of the compliance rules, manage the process of reminding in case of incomplete files/kits and is also theft-proof which means documents can’t be removed from the file once it is declared complete.

At Kleeto, we have created an end-to-end document management solution which not only supports document archival but also document collection, document generation and inbuilt compliance engine to support all requirements related to managing document compliances be it employee file, loan file, legal documents, invoices etc. We have these solutions deployed with many large corporate customers where the document compliance is an automated function and can be checked with a single click. Contact us for more details at www.kleeto.in