For a business to operate legally there is need for it to be in agreement with particular requirements in regards to transactions, safety procedures and labor practices to be carried out by the company. These regulations are set out with respect to the industry in which the company will operate predominantly. Any company wishing to operate legally should be ready to comply with both external and internal requirements (Internal and external compliance).
External requirements are usually state sanctioned and are aimed at the following;
- Providing assurance that the company or organization is adhering to all external requirements.
- Providing a blue print for achieving the said external compliance.
There are various range of approaches through which external compliance can be achieved. Basically, a manual that is periodically signed by the compliance management task force is used. At a more comprehensive level, there is inclusion of regular compliance confirmation procedures by a larger group of management officials and staff. At this point, non-compliance risks and ongoing risks are brought together in a self-assessment procedure.
Internal compliance ensures that policies, codes, controls and standards that are set within a company are met. These house-keeping guidelines are greatly influenced by external compliance requirements and are inclined to ensure that companies operate with integrity.
There are various benefits that the concept of compliance may extend to a business. These include but are not limited to the following;
This is especially so for internal compliance. Whenever there is compliance to internal requirements such as employee benefits, compensations, wages and employee protection, there is a favorable work environment. This in-turn works as a motivating factor to foster a positive attitude towards work.
Clients also become more confident knowing that they get the best deals since internal compliance calls for fair play in the way an organization handles its clients in terms of service and pricing.
Lower rates of incrimination.
Every business wants to be in good terms as far as the law is concerned and what better way to achieve this than to have a framework that will enable the business to achieve both internal and external compliance. A compliance department is a requirement that companies should put into use to ensure that they are able to be in good books with the law in light and with the hundreds of laws that set the legal benchmark for running a business.
The image that your business portrays in the public domain contributes a lot to the success or failure of the business. The public will quickly lose its trust in an organization that is caught up in court tussles. Needless to say lack of trust from any quarters translates to lower revenue hence lower profits. Compliance will ensure that there is both investor and client confidence by ensuring that the company upholds a favorable image. A trustworthy company is always at a better position to attract business and compete successfully in any market.
With a proper compliance framework, it becomes easy for an organization of any size to execute what is required of it and therefore operate within the set parameters as defined by law. Proper consultation will ensure workable compliance mechanisms are put in place for the organization to function as required.