How Improving Compliance Will Help Build Your Business
Being in compliance means your business abides by all associated laws, rules and regulations that ensure companies operate responsibly, ethically and safely. Becoming compliant is typically a process, especially since many specifics change after people in power make new decisions. In other words, getting aligned with requirements is not a one-and-done effort.
You should aim to improve compliance throughout your company’s life. Here are some of the many reasons why taking that approach can strengthen your enterprise.
Avoid Fines and Negative Attention
Regulators often penalize non-compliant parties by issuing them fines. Depending on the nature of the infraction, the money to pay could be substantial, and a company could find itself getting unfavorable attention in the media. Improving compliance — especially regarding things like taxes and data protection — can help your business steer clear of monetary punishments.
Besides how receiving a fine could drastically affect your company’s financial standing for the year, such an event could also cause the public to mistrust your business or form undesirable opinions.
One of the best ways to ensure you don’t fall afoul with regulators is to meet with experts who can look at your current systems and processes and determine what to change. For example, accountants can look at your tax paperwork to check if everything’s in order.
Keep Your Company Running Smoothly
Various state and federal stipulations exist to spell out what legal compliance means for businesses. The steps you must take and the paperwork required vary depending on the type of business you have and where it operates. Corporations have the strictest internal requirements, including holding annual meetings, recording what happens in those gatherings and documenting all stock transfers.
Licenses and certifications are issued by state authorities. Restaurants need up-to-date health and safety certificates. Moreover, if a business sells regulated products like alcohol or tobacco, it must have a license.
Letting this kind of compliance lapse would mean your enterprise may need to stop selling those items or close down completely until it gets restored. Remaining in compliance lets you stay open and increases the chances of profitability.
Increase Customer Loyalty
Getting compliant and staying that way could also increase the chances of people wanting to do business with you and becoming repeat customers. A 2018 study showed that 91% of customers were more likely to do business with entities that showed a commitment to protecting their information.
It’s much easier to do that if you follow a process for getting compliant based on the kind of data collected. Then, you can show through actions that keeping customers’ data safe matters.
Payment card interface (PCI) compliance concerns what you must do when taking credit or debit card details from customers. The United States does not currently have a data privacy law that specifies how to treat customer information. However, if you engage with people from the European Union — such as through a website — your company must comply with the General Data Protection Regulation (GDPR).
Reduce Workplace Dangers
Business compliance is also crucial for growth due to how it minimizes the chances of accidents. What constitutes it varies depending on the type of business operated. Statistics show that the warehouse and storage industry employs nearly 1.2 million Americans. Data also indicates that the fatality rate in warehousing is higher than the national average. Workplace safety compliance can help you have a more productive workforce.
The Occupational Safety and Health Administration (OSHA) provides workplace standards across various industries. Some of the ones related to warehouses concern powered industrial trucks and material storage. Other specifics apply to sectors including agriculture and construction, among others. Businesses have also more recently dealt with new compliance measures concerning workplace safety and the COVID-19 pandemic.
Becoming compliant for the first time or ensuring you stay compliant can be challenging. Your company may find it worthwhile to hire an outside expert who can perform a detailed audit and highlight room for improvement. That way, you have a baseline reading and will understand which areas particularly need your attention to avoid future issues.
Achieve a Competitive Advantage
Prioritizing compliance can also help you compete in the marketplace, especially when the measures you follow minimize risks and show current or potential customers that you care about following the rules. For example, contractors placing bids to provide services for the U.S. Department of Defense must certify that they meet basic cybersecurity standards.
In that case, compliance directly relates to profitability because the DoD won’t accept bids from entities that fall short in online security. It can also show customers and employees you’re committed to their safety or invested in doing business sustainably to remain mindful of the planet’s future.
When businesses take compliance seriously and view it as a competitive advantage instead of merely checking a box to fulfill a requirement, they’ll be more likely to maintain an environment of continuous improvement. After meeting all the compliance requirements at the federal and state level, what could a business do to go even further to make the enterprise the best it can be? Figuring that out can help a company get stronger through the years.
Enjoy More Visibility
Many types of compliance guidelines require companies to keep in-depth records of their operations. Such rules may seem time-consuming to follow, but they offer multiple advantages for business. If an enterprise gets audited, having a robust system in place to record what occurs at the company can make it easier for representatives to locate the requested information in a matter of minutes rather than potentially requiring hours or even days to source it.
Making excellent recordkeeping the norm instead of the exception for compliance purposes can also facilitate spotting minor problems and addressing them before those matters become major risks. When company leaders look back on things that went wrong, they often admit to never expecting those events to happen. Numerous factors could blindside a person like that, but if the enterprise has careful, accurate data about its operations, getting taken by surprise often becomes less likely.
You may decide to utilize compliance software or another specialty option to stay on top of the rules. Some solutions have automated features that catch mistakes people miss and ensure you don’t become noncompliant without realizing it. These innovations can prevent blunders, plus give you a clearer picture of what happens at your business and which vulnerabilities you should target.
Compliance Makes Good Business Sense
This overview shows that complying with the regulations associated with your industry puts you in an excellent position for ongoing growth. Getting compliant means putting forth a dedicated and consistent effort, but doing so should pay off in the ways mentioned here and others.