Is your telematics provider SSAE 16 compliant?

CompliantAccurate data is essential to any organization. Research proves that inaccurate data directly impacts the bottom line for 88% of businesses costing them 12% of annual revenue.*

Your telematics provider is a service organization responsible for managing your business data as per your fleet requirements. They provide services that track and report insightful data pertaining to your rubber tire vehicles, equipment, support equipment, drivers (HOS), and other reporting.

As your telematics provider partners with you in providing in-depth data about your key operations, it is important to consider if they meet SSAE 16 reporting standards to validate the integrity of your data.

So, what is SSAE 16?

SSAE 16 is the Statement on Standards for Attestation Engagements standard put forth by the Auditing Standards Board (ASB) of the American Institute of Certified Public Accountants (AICPA) that addresses engagements undertaken by a service auditor for reporting on controls at organizations (i.e., service organizations) that provide services to user entities, for which a service organization’s controls are likely to be relevant to a user entities internal control over financial reporting (ICFR).

In translation, SSAE 16 requires your telematics provider to provide a description of their system along with a written assertion by management, to ensure proper data control standards are met. Common examples of service organizations include companies in the industries of Software as a Service (SaaS), Application Service Providers (ASP), Cloud Computing and Managed Services.

What does this mean for you as a fleet manager? Do you need a SSAE 16 compliant service provider?

There are 3 key questions to ask:

1. Does your telematics data impact the assets shown on your financial statements

For example: Do utilization reports for your yellow gear equipment play part in calculating depreciation value?

2. Do you have capital transactions being authorized based on the insight provided by your telematics data?

For example: Do you use utilization reports per project to decide if new equipment should be bought?

3. Does your telematics provider share responsibility of any of your assets and liabilities?

For example: Does your telematics provider partner with equipment manufacturers to manage your assets as a
third-  party?

If you answered ‘Yes’ to any of the above questions, then you will benefit from asking your telematics provider to be SSAE 16 compliant! It is important that the internal reporting controls your telematics provider practices are per Accounting ICFR standards, because when they are compliant so is the data flowing into your organization and your financial reporting. It is crucial to pay attention to the integrity and standards that we hold to our data, so the benefits of telematics data to your organization and fleet are properly realized.

* https://econsultancy.com/blog/64612-the-cost-of-bad-data-stats/