For digital platforms, compliance is becoming increasingly complex, with new and expanding reporting obligations often spanning multiple jurisdictions. This is driving demand for compliance and reporting solutions. But what makes a good compliance solution for digital platforms? And which features should you look for when making your choice? This blog gives you the clarity you need to make the right decision for your business.
Marketplaces, travel and accommodation platforms, and gig economy platforms often need to comply with DAC7, while crypto businesses and fintech companies may face requirements such as DAC8/CARF and other reporting regimes. When looking for a compliance solution, you will typically come across two types: traditional accounting software and standalone compliance tools. Either may be perfectly sufficient for some businesses, but they can quickly become limiting as reporting requirements, data volumes and jurisdictions grow. Accounting systems were not built for end-to-end regulatory reporting, while standalone tools often focus on a single regulation or reporting process.
Whatever solutions you have on your shortlist, make sure to evaluate them against the following checklist:
- Does is offer the right integrations?
- Does it identify missing information and automate seller outreach?
- Does it actually automate the whole reporting process?
- Does it offer the right jurisdictional coverage?
- Does it keep up with regulatory change?
- Can it scale with you?
1. Does it offer the right integrations?
Compliance starts with data, but that data rarely lives in one place. For a digital platform, seller information may sit in your marketplace, payment data in a PSP such as Stripe, and additional information in your CRM, ERP, internal systems or even Excel files.
A good compliance solution should be able to integrate, orchestrate and synchronize all these different data sources, creating a single, consistent overview of your compliance data. This means bringing scattered information together, keeping it up to date and organizing it in a way that supports the entire compliance process. And with regulations constantly evolving, it should be easy to add new data requirements to the same workflow when needed.
To do this effectively, the solution should integrate with the systems and data formats you already use. This should include your onboarding tools or, even better, offer onboarding workflows directly within the compliance solution. Ideally, these workflows should be customizable, allowing you to collect exactly the information you need to stay compliant from the moment a seller joins your platform.
Look for broad integration and orchestration capabilities, rather than a connection to just one specific technology ecosystem. The more manual data exports, imports and field mapping you can eliminate, the more scalable and efficient your compliance process becomes. Your compliance solution should reduce manual work, not create more of it.
2. Does it identify missing information and automate seller outreach?
Having the right integrations and a clear overview of your data doesn’t necessarily mean you have all the information you need. A good compliance solution should first be able to check your data for completeness, consistency and validity, and identify what is missing or needs to be updated. This means flagging a missing address, an invalid TIN or inconsistent seller information, for example.
But identifying the issue is only the first step. The solution should also help you resolve these data gaps before reporting. For regulations such as DAC7, this may mean collecting additional or updated information directly from sellers. Instead of manually contacting sellers and tracking responses in spreadsheets, your compliance solution should be able to automate seller outreach, data collection and reminders.
Seller outreach and specific data collection, such as TIN collection, should be built into the compliance workflow itself, making it easy to request missing information, follow up with sellers and keep your data up to date - without adding unnecessary manual work.
The goal is simple: identify and resolve data issues before they become rejected reports.
3. Does it actually automate the whole reporting process?
Once your data has been collected, validated and issues have been resolved, you should be well on your way to reporting. But we’re not there yet: a compliance solution should do more than simply generate a report.
It should allow you to select the applicable regulation and jurisdiction within a few clicks, and then automatically determine the required data and transform it into the correct reporting format. With different regulations and jurisdictions using different data and technical requirements, this can otherwise become a significant and error-prone task.
And just as importantly, reporting does not always go perfectly the first time. Seller information can change, data can be corrected and tax authorities can reject or request amended submissions. Corrections and resubmissions should therefore be part of the standard workflow, not an expensive or complicated exception.
When comparing solutions, ask whether submissions, corrections and resubmissions are included and whether there are artificial limits or additional costs attached to them. Generating a report is not the same as completing the reporting process.
4. Does it offer the right jurisdictional coverage?
“Supports DAC7,” for example, does not necessarily tell you everything you need to know. While different jurisdictions may implement similar reporting standards, the exact rules and technical processes can differ. For example, the UK has its own Digital Platform Reporting Rules rather than implementing DAC7 itself. The same applies to other regulations such as DAC8/CARF and US reporting regimes. Differences can include deadlines, technical specifications, submission procedures and local implementation rules.
If your platform operates internationally, make sure the solution covers the specific jurisdictions and reporting obligations relevant to your business, rather than simply supporting the name of a regulation.
5. Does it keep up with regulatory change?
A compliance solution should not become obsolete every time a new regulation is introduced or existing rules change. If you currently need DAC7 but may later need DAC8/CARF, CESOP, VAT, 1099-K or other reporting regimes, consider whether the solution is designed to support multiple regulations from the same infrastructure and adapt as rules evolve.
New reporting requirements should be easy to add without having to introduce another system, rebuild your integrations or create an entirely new workflow.
Regulatory updates should be part of the platform, rather than something your team has to manage reactively.
6. Can it scale with you?
Finally, think about where your business will be in a few years. A solution that works for 500 sellers may become difficult to manage at 50,000. Likewise, expanding into a new country should not mean creating a new compliance process.
Scalability means being able to handle more sellers, more data, more entities, more jurisdictions and more regulations without adding more systems or multiplying the manual work.
The solution should make compliance easier as your business grows, rather than creating new complexity at every stage.
So, what should you actually look for?
The best compliance solution is not necessarily the one with the longest feature list. It is the one that offers the features your business needs and is easy for your team to use without requiring additional technical expertise or resources.
The questions in this article give you a practical framework for comparing compliance solutions - and choosing one that fits not only your needs today, but also where your business is heading tomorrow.
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