The Importance of Compliance in Business
So, just what is compliance, and why is it important? Compliance is one of the most critical elements of a business, yet many business owners are unaware or oblivious to what it is and how it can help.
At Grow Advisory Group, we are committed to nurturing business growth and attracting new customers because of our ability to help businesses in this respect. However, one of the most common pitfalls we see in new customers is their lack of compliance. While this may not seem like a big issue, it can be the downfall of a business and should be accessed by your accountant.
Today, I’ll take a moment to explain to you, first, what compliance in business is, and why it’s important to your business.
Table of Contents
What is Compliance in Business
Let’s start by defining compliance in business. Simply put, compliance is the act of following the rules, standards, awards, regulations, and ethical practises that apply to your industry and business as determined by law or any governing body. Such compliance applies to your staff, treatment towards consumers, and business management.
Businesses generally have some form of a compliance program in place for protection. Think of it as an investment, an investment that can potentially protect your business against fraud, discrimination, and internal HR issues.
If you have no compliance program in place, then contact the team at Grow Advisory Group.
Why is Compliance Important for Businesses
Avoid negative exposure
Negative media exposure can end business empires. Failing to pay staff fairly, ripping-off customers or clients, or failing to abide by your legal tax requirements will generate the type of negative media exposure that can become a PR nightmare.
The cost of non-compliance can be high also. You may lose customers and clients, and potentially lucrative partnership deals. You could also lose investors and potential buyers if your reputation is severely tarnished.
Avoid lawsuits
No-compliance can open a business up to potential lawsuits that could otherwise have been avoided. An example would be an employee’s work injury as a result of an incorrect – or nonexistent safety procedure. A compliance program addresses all areas of compliance, including safety, to at least cover you should such an event happen.
Improve the Bottom Line
Past studies have proven that businesses with solid compliance programs in place perform better than their counterparts. One assumes that a business that spends less time dealing with non-compliance spends more time festering proactive measures to gain a leg up on their competition. Moreover, will less legal fees and penalties to subtract from profits, they have a healthier bottom line.
Retain Staff
You may have heard the saying, ‘a business is only as good as its people’. Any savvy business owner knows this and knows that staff retention saves money. Thus, if you fail to treat your staff right; pay them below the award wage, withhold their entitled benefits, etc., you will only be hurting your one business. Happy staff are productive staff. Unhappy staff won’t stick around, and you could face a lawsuit for non-compliance.
Conclusion
If you own a business and have compliance management in place, then you should consider rectifying this at your earliest convenience. Compliance is the act of complying with the rules, regulations, or standards relevant to your business and industry.
In business, compliance is essential. With a compliance program in place, you can avoid negative exposure, avoid lawsuits, improve your bottom mine and retain staff, amongst other things.
If you would like to invest in a compliance program for your business, then contact the proficient team at Grow Advisory Group. We can assess your internal policies and procedures and use our knowledge in your industry to devise the right compliance program to prevent your business from possible fines and lawsuits. We can also assist with private ruling applications, superannuation guarantee charge statements and other compliance accounting services.
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Disclaimer: The information contained in this blog is general in nature and does not take into account your personal situation. You should consider whether the information is appropriate to your needs, and where appropriate, seek professional advice from an accountant and/or financial adviser.
