Regulatory Compliance is a Requirement, Not an Option

Among the best ways to get your business into irreparable trouble, not paying taxes (especially payroll taxes) and breaking the law have to rank near the top. Sometimes noncompliance with laws and regulations is simply a matter of indifference. However, ignorance is no excuse, so business leaders must be proactive with compliance programs and training. Such programs and training give evidence of due diligence rather than negligence, which can mitigate consequences for unintentional noncompliance.

Various local, state, and federal agencies have literature and resources to help companies stay in compliance. Especially within small and mid-sized companies, this compliance role is a control function that often naturally falls within the accounting and finance group.

Many companies find themselves doing business abroad, and the US Customs and Border Patrol has a Trade Compliance site, and the Census Bureau has Export Training. Each industry has its own sets of laws and regulations — including environmental, health and safety, and HR-related, to name just a few categories — and a busy finance professional probably cannot expect to stay on top of every detail and change. Thus, outside compliance professionals can provide systematic and ongoing support, often for a reasonable fee. That said, a finance professional needs to know the broad categories of compliance that need to be monitored on an ongoing basis, as well as red flags to look for. This is integral to an effective enterprise risk management program.

The best compliance initiatives and training programs are ongoing, proactive, and systematic. If you want your business to survive and thrive, compliance is a fundamental requirement, not an option, for every person and group within an organization. Senior management sets the “tone at the top” for zero tolerance of regulatory noncompliance.

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