Businesses of every size will need to adhere to both state and federal laws. However, with many regulations to follow and obstacles to overcome, this can often feel like an impossible challenge, especially for small organizations.
Even the most experienced entrepreneurs can have trouble remaining updated with the many evolving laws. To avoid legal and financial repercussions, ensure you read these five tips to help your business remain compliant.
1. Recruit a Compliance Officer
Hiring a compliance officer will ensure your business adheres to every regulatory and legal requirement. What’s more, they will create internal policies and bylaws and ensure they are followed each day.
Compliance officer duties include:
• Creating and updating a compliance manual
• Drafting a company’s form ADV
• Talking to the business leaders to maintain standards
• Carrying out routine audit procedures
• Implementing disciplinary procedures for a breach
After you have recruited a compliance officer, you must ensure they have a firm understanding of the company’s goals and the industry’s standards.
2. Join an Industry Association
If you haven’t already done so, join an industry association to remain updated on new regulations and regulatory changes. Also, the membership will support a compliance officer in their role, which will ensure your business never puts a foot wrong. This kind of peace of mind will allow you to continue working as normal.
3. Automate Accounting and Taxes
Various software tools can help your business to stay up-to-date on changing accounting and tax laws. For example, the likes of QuickBooks and Turbo Tax will update their platforms to reflect any changes to tax or accounting laws. So, you can quickly adjust your operations and finances to ensure you remain 100% compliant during tax season.
4. Safeguard Your Data
As there isn’t one federal law for data compliance, you might be unsure how to adhere to your legal responsibilities. After all, different sectors will need to follow various laws and regulations related to credit information, marketing data, telecommunications, health information, and more.
Therefore, you must protect all sensitive data to ensure you comply with consumer data protection laws, GDPR, data regulations, and non-disclosure agreements (NDAs).
In addition to backing up files, encrypting customer information, and investing in anti-virus solutions, you must take the steps to protect all business communications. For example, you could remain compliant by providing your team with open source collaboration software. As it is self-hosted, you will have complete control of the data, and the contents of the internal messages will never fall into the wrong hands. Don’t neglect the importance of this.
5. Subscribe to Updates
Many law-creating entities and enforcement websites will allow businesses to sign-up for legal updates. By doing so, you will receive direct information from the source of any legal announcements that could affect your operations. As a result, you can then update your compliance manual, inform your team of the upcoming changes, and ensure your business is fully prepared for a new law.
If you follow the above top tips, your business can follow every new and evolving law, which will help your brand avoid a lawsuit.