Five Major Entity Compliance Mistakes to Easily Avoid
As an in-house team knows, corporate compliance is one of the most important parts of the job. Noncompliance can result in audits, hefty fines, and sometimes even termination of your business. But it’s equally true that keeping a finger on the pulse of your corporate compliance at all times is a significant undertaking. There are so many laws and regulations and moving parts that sometimes it seems impossible to be entirely sure your business is 100% compliant.
There are ways to simplify corporate compliance management, like corporate compliance software. But first, let’s discuss five major corporate compliance mistakes that companies often make so you know how to avoid them.
#1: Using General Policies
It seems that it would be much easier to use a general corporate compliance policy, a standard template you can find anywhere and apply to your business. The problem with general policies is that there simply isn’t a one-size-fits-all when it comes to a successful corporate compliance program. Every corporation is different, so every corporation’s compliance risk is different.
It’s essential to create a custom external and internal compliance policy. You may use another compliance policy as an example of what you want. Still, you should edit heavily and review the policy carefully to ensure it fits your business. Make sure to include proper compliance training in your successful compliance program. You’ll also need to make sure that your compliance program is regularly updated so that it continues to cover your business’s compliance risk fully.
#2: Keeping Departments Disconnected
Communication is key to running any business, especially when it comes to corporate compliance. The more individuals in communication with corporate compliance ongoings, the quicker you’ll be able to catch regulatory compliance risks early and fix them before they become a problem.
Too often, as businesses grow, their departments become further disconnected from one another. This can lead to departments failing to share vital information. For example, let’s say during financial accounting procedures an accountant notices a compliance risk that an HR personnel has also noticed. If both are working to resolve the issue without informing the other, that’s time and effort wasted, which can also lead to clumsy resolutions of the compliance issue.
On the other hand, if departments work together, a business is more likely to stay on top of compliance. Corporate compliance software programs can make it easy for departments to stay in touch and keep each other updated on compliance issues and internal policies.
#3: Scaling Your Corporation Without Scaling Compliance
Naturally, you want your business to grow. However, as your business grows, so too must your corporate compliance programs. There are compliance rules concerning the number of employees or business holdings, which are likely to change as your business scales. The nature of your business may also change, necessitating compliance changes.
It might seem easier to stick to your old compliance policy or to keep that policy flexible and vague so that it can remain the same as you grow. However, your compliance risk will continue to grow as your business does. It’s essential to scale your compliance policy with your business so that you remain as risk-free as possible no matter how much your business grows. This is why regular compliance updates and maintenance are a must.
#4: Onboarding and Offboarding Mistakes
Many compliance issues occur during the hiring or laying off stages of employment. These are sensitive procedures, and often the processes are so varied they lead to inconsistencies. Make sure that when you onboard new employees, you use the same methods consistently. The same rule should apply when laying employees off.
In addition to being consistent, you must have thorough and easily accessible documentation. In this day and age, digitized onboarding and offboarding process files are a must. Make sure employees can easily find the relevant documents they need. Thorough, digital documentation will also come in handy as proof of compliance should any disputes arise.
#5: Not Utilizing Corporate Compliance Software
We are living in a very digital age. A corporation that relies on physical documents and a physical filing system is sure to be disorganized. Moreover, utilizing a multitude of file-sharing software and digital file storage leaves security gaps. This has become even more true with the rise in work-from-home situations. Centralized corporate compliance software can help streamline and secure the compliance process.
Employees can spend hours focused on the intricacies of corporate compliance. That might be fine if corporate compliance was their only job, but most of the time, they have other important tasks which demand their attention. When corporate compliance becomes overwhelming, other tasks may take a backseat. Consider, too, that not all of your employees are likely to be corporate compliance experts, which means they might not be equipped to spend most of their workday focused on compliance.
Many of today’s corporate compliance software options feature robust automated processes that allow your employees to smoothly accomplish their tasks and move on. With corporate compliance software, your team will save hours per week while minimizing the risk of compliance errors. That time can be spent on more valuable tasks, truly optimizing the skills of your employees. Corporate compliance software also offers collaborative frameworks, so employees across different departments can easily communicate and work together. You can also collaborate better remotely with off-site employees and other interested parties.
Expert Corporate Compliance With Filejet
Looking for the right corporate compliance software? Filejet is a collaborative, automation-capable platform for your corporate compliance needs. Filejet stays updated on entity management and corporate compliance so that you can keep your finger on the pulse with less effort. We are more than just an email alert, our platform has automation and wiht complete transparency on entity status. In fact, 66% of newly onboarded clients are out of compliance with their current entities with our onboarding audit. That’s an immediate return on spend. Want to learn more about how Filejet can help your company? Contact us today for more information or to schedule a demo.