Every business is expected to follow certain rules and certain standards. Failure to comply with these rules and standards could have negative implications on your business. Below is a guide to making sure that your business is compliant.

The dangers of non-compliance

Some companies are able to get away with not following certain rules and standards. However, many companies can get caught out – a complaint may be all it takes to launch an investigation, which could reveal what you’ve been up to.

Not following rules could result in heavy fines or lawsuits. Your reputation could also be affected if news of non-compliance gets out to the public, which could affect your ability to attract customers. Your relationship with suppliers, investors and employees may even be damaged. In cases, where there is a serious breach of rules and standards, your company may even be forced to shut down.

Mandatory vs voluntary compliance

There are two types of compliance in business – mandatory and voluntary compliance. 

Mandatory compliance involves laws put in place by the government or local council. This involves taking measures like paying the right amount of tax, applying for necessary permits and insurance, protecting data and following advertising laws. Not complying can have serious penalties such as fines or even jail time.

Voluntary compliance involves a set of guidelines put in place by certifying bodies. Following these guidelines isn’t a legal requirement, however your company’s reputation could still suffer if you don’t follow them. For example, an investment firm that has undergone GIPs performance may be more trusted by customers, because it proves the company operates to a certain level of efficiency and social responsibility. Other examples of such certification include SSL certificates, Fairtrade certification, Leaping Bunny certification and various star ratings.

How can I make sure my business is compliant? 

You can make sure that your business is compliant by arranging a professional audit. For large companies, annual statutory audits may be required by law, however most small companies do not need to undergo such audits.

During an audit, a professional inspector will thoroughly examine your business to determine which rules and standards you are following. At the end of the audit, you will be told which rules and standards you have failed to comply with. You will then be given time to make any necessary changes, which must be made before a follow-up inspection is held. 

Audits tend to focus on specific areas such as tax audits, health and safety audits, security audits and environmental audits. After several years, it could be worth renewing them to make sure you are still compliant.

Some companies outsource professionals or hire in-house staff to implement compliance measures. This could include hiring an accountant to make sure that taxes are filed correctly or hiring a data protection officer to maintain GDPR compliance. 

All in all, compliance is something you shouldn’t have to manage alone. There are so many business laws and guidelines that it is impossible for one person to keep track of them all – by hiring the help of qualified experts, you can make compliance easier.