Business compliance used to be a topic that only mattered to large organizations with designated compliance departments handling multiple levels of regulations. With today’s reforms in labor law, health and safety, and an evolving business landscape creating new licensing requirements, even your small business needs to handle a variety of compliance duties. And as your business grows, your responsibilities for compliance will grow with it.
While your responsibilities as a business owner are increasing, you likely don’t have an in-house compliance department to take on every new compliance directive. Don’t worry: there are a few tools and tactics that you can use now to stay ahead of and in compliance with these requirements.
Your main business compliance duties
When it comes to the exact laws and procedures you need to follow for your business, you’ll want to speak with an expert or your lawyer. To get started, here are a few major business compliance categories:
Start-up and operational compliance
This category is about the steps you’ll need to take when you build your business’s physical space and then open your business. It can include items like building and environmental permits, licenses to start operating in your industry, Americans with Disabilities Act (ADA) compliance, and paperwork to form your business.
Labor compliance
Labor law is a subject that’s greatly expanded over the past decade, especially in New York State. New protections for workers have placed more responsibilities on employers for record-keeping and benefits tracking. Some of the labor law compliance responsibilities that you need to be aware of are parental leave, minimum wage, sick leave accruals, fair work schedule laws, and changes to laws about accruing and paying tips.
Health and safety compliance
Since the COVID-19 pandemic, this category has expanded and changed on a weekly or monthly basis as the country adapts to operating during an active outbreak. As a business owner, you need to keep track of mask mandates, requirements for disease prevention, and requirements for handling an outbreak. Some states have specific laws for health and safety, such as the NY Hero Act, that will impact your business.
Beyond COVID measures, each city and municipality have their own health department requirements depending on the type of business you run.
Financial compliance
Financial compliance mostly involves your federal, state, and local taxes. It also includes the financial aspects of other types of compliance. For example, you have financial compliance requirements related to taxes, unemployment insurance, and worker’s compensation insurance that also fall under labor compliance.
New rules for financial compliance have come up from pandemic relief programs, such as having interim financial statements available upon request by government agencies.
Choosing the right business compliance software
Effective business compliance software is important, especially if you don’t have an in-house compliance team.
The most important program that your business needs is bookkeeping software. Accurate financial records form the foundation for all your other compliance duties. For example, accurate labor compliance requires reporting consistent total wages in your tax returns and your quarterly and annual labor filings. A good bookkeeping system will ensure that everything is accurate for your reports and filings.
Apart from a bookkeeping system, there are other compliance software categories to consider:
Training software
Many compliance requirements mandate employee trainings (such as health trainings, sexual harassment trainings, and occupational safety trainings). Choosing good training software can streamline these required trainings and document when your employees complete them.
Professional Employer Organization (PEO) software
PEO is a collection of software that helps you manage your labor compliance requirements. You’ll at least want to use PEO for payroll processing. This type of software is affordable and can accurately complete your payroll information, which can be a time-consuming process on your own.
Delegating business compliance responsibilities
Once you have your compliance software in place, you’ll need to set up your team to manage various compliance duties. The current workforce is looking for more responsibility and mixing your staff’s basic job duties with managing one or more compliance duties can help you fulfill this need.
Consider which staff members and departments are most appropriate to handle different aspects of compliance. Obviously, you’ll have the final say on all these matters but delegating the responsibility makes the workload manageable and makes people accountable for these decisions.
Using business compliance specialists
Even with assigned responsibilities within your business, many compliance tasks are impossible without the help of specialists. Here are a few specialists that you’ll need to engage at some point:
Legal experts
If you have more than one owner for your business, you’ll need to hire a lawyer to complete the ownership documents. This includes bylaws or a business operating agreement and any offering documents for potential investors. Many operating licenses also require specialized legal assistance, such as liquor licenses.
Licensed professionals for construction
Code consultants, expeditors, architects, engineers, and other licensed professionals are required to complete construction for your business. These experts have experience with building laws and requirements to get a job done.
Finance professionals
For your annual tax filings, it’s recommended that you work with an accountant or certified public accountant (CPA). If you’re looking for help pitching your business to investors, you’ll also want to make sure that you’re working with someone who has a securities license from the U.S Securities and Exchange Commission (SEC).
Operational consultants
Many daily responsibilities require outside expertise. This might include:
- import/export forwarders if you’re conducting international trade
- chef consultants that are knowledgeable about health department requirements if you’re in food service
- a good human resources consultant who’s familiar with the latest requirements from employers
Business compliance duties will continue to grow
Compliance duties are expected to grow for all businesses in the future. As legislators try to make the workplace and customers safer, more responsibilities will be placed on you, the business owner. With the tools and tips above, you’ll be able to navigate the complex world of business compliance and keep your operations running smoothly. If you need funding to support your business compliance efforts, get in touch with Pursuit. We offer more than 15 different business loan programs that can meet the unique needs of your business.
