Every industry has its best practices and standards. While many of these can be to stay up-to-date with competitors, others are to maintain regulatory compliance. As such, your business could be fined or face other penalties if you don’t follow them. One of these is compliance reporting.
If you’re wondering what this is, you’re not alone. Many new or potential entrepreneurs are still getting through the legal aspects of their company. That doesn’t mean that you should dawdle with getting around to your compliance reporting.
Instead, it’s something that you’ll need to get to grips with relatively quickly. It’s something that your business will need to be involved in almost constantly, even if you’re not aware of it. If you’re curious about what this is, then there are a few things that you should know.
Does your company need to engage in compliance reporting? Is it actually important? What even is compliance reporting? These are questions that every business owner should have answers to.
What Is Compliance Reporting?
As you might have guessed from its name, compliance reporting is working alongside auditors and proving that you’re adhering to regulations. These reports will highlight exactly how your company is following industry standards and all relevant laws.
You will have to include a lot of information in these reports. However, this will typically revolve around how your customer and company information is dealt with. You’ll need to outline how this data is controlled, stored, secured, and distributed.
To what standard you’ll have to collect and present this information can vary from place to place. In many cases, such as the United States and the United Kingdom, guidelines are relatively easy to follow. That doesn’t mean that your compliance reports will be done and dusted quickly, though.
Instead, it will be an ongoing process. Standards continue to improve and change over time. As a result, you’ll need to continually update your compliance reporting standards. Thankfully, there are many tools that can be used for this, many of which can be automated.
Compliance reports will typically be created by the IT department. Many companies have a compliance department, however, in which case it will be their job. Others will outsource this to a specialist.
Why Is It Important?
You might be wondering why compliance reporting is important. To some entrepreneurs, the answer to this would be obvious, though it won’t be to others. One of the most notable, and perhaps vital, is that you’ll be meeting legal standards.
Failing to do this can result in fines or penalties, both of which can get more severe over time. It could even result in the closure of your business, if issues are allowed to get bad enough. Avoiding this completely might be the largest reason to engage in compliance reporting.
There could be several other benefits to your business, however. For instance, it could help you identify where your data collection and storage can be improved. That’s especially true for security, which is one of the more crucial aspects of your company.
If your business is involved in any kind of online transactions, then security is paramount. The compliance reporting process ensures that you’re not only secure, but can identify areas of improvement. That will help protect your firm and its customers from any potential hacks.
What’s Included In A Compliance Report?
Almost every industry is required to be involved in compliance reporting. These can be regulated by different laws and agencies, however. What standards your company needs to follow with the practice can be different from that of another sector.
Since you’ll need to be engaged in the practice, it’s worth knowing exactly what you’ll need to include in a report. These are:
- A statement outlining the relevant legislation;
- A summary of what’s included in your report;
- A review of your process, and;
- A conclusion with the findings and analysis of your compliance review.
These should help compliance reporting go much easier for you. Since you’ll have to be engaged with it almost constantly, that could be a welcome advantage.
While being compliant with regulations may seem like a pain, it’s there for a reason. Your company’s and customers’ information should be secure. Ensuring that you’re making this a priority and running your business effectively should be vital.
While that means taking the time to review and improve your process, this will reap dividends in the long term. That doesn’t mean that compliance reporting needs to be difficult, however. Instead, there are multiple tools and resources, alongside experts, that you can utilize.
What’s stopping you from making things much easier for your company?