While everything about a business, from its brand to its product, is vital to its success, one factor that can severely affect a company is industry compliance. It is surprising, then, to know that many business owners do not know what compliance is, let alone how it can affect their company.
Simply put, compliance is the act of following the rules and regulations set by the industry. It applies to essentially every aspect of the company—how the business is run, how the customers are treated, and so on. The reason compliance exists is to protect the company from all sorts of trouble, whether it be fraud or legal problems.
With that being said, if you want to fully understand what compliance is and why it is so important, you are in the right place. In this article, we will share precisely why compliance is so essential for your company.
1. Increases profits
Companies are all about making a profit. Knowing that being compliant helps boost bottom lines, it is only logical to be compliant! That said, being compliant helps a business make more money because it means it will not have to waste time addressing non-compliance problems. It will end up with more time to focus on other efforts to increase its competitive advantage. In other words, being compliant leads to more profits and fewer penalties.
2. Avoid legal issues
Lawsuits are commonplace in the business world. This is because of injuries and other issues due to non-compliance to safety laws and regulations. By being compliant, a company can maintain a safe and productive working environment. This leads to reducing the risks of potential issues, which can help a company avoid expensive lawsuits that waste a lot of time and money.
3. Maintain staff retention
Every business knows that it is only as good as the people that run it. This means that a company that fails to be compliant and mistreats its staff, such as by giving them unfair wages or holding back their benefits, will ultimately run into problems. When a business is compliant, employees tend to be much happier and more satisfied with their work, which can translate to better productivity.
4. Builds a positive reputation
A reputation takes years to build and only mere seconds to destroy. The last thing any company wants to deal with is someone or something that hurts its reputation, leading to negative exposure in the offline and online world. Unfortunately, non-compliance can cause this problem. It can lead to negative exposure that can cost a company customers and opportunities. Being compliant helps maintain a good reputation, which is vital in building trust between businesses and customers.
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Being compliant means setting yourself up for success. When your business follows your industry’s rules and regulations, you can maintain a positive business image. Your business will also provide a productive and safe work environment and become more attractive to customers to grow your business.
That said, being compliant in specific areas, such as accounting, can be extremely challenging. As such, it pays to work with professional services to address compliance needs to ensure you minimize costs and maximize profits!
New Wave Accounting offers end-to-end accounting and bookkeeping services in Australia to help small businesses scale and grow quickly and efficiently. If you are looking for small business accountants to help you stay compliant in your finances, work with us today!