How can small businesses ensure compliance with regulations and industry standards?
In business terms, compliance is the process of assessing whether companies are adhering to relevant legislation and regulations.
These can differ between businesses depending on their size and number of employees but the same logic applies – to facilitate safe working procedures and avoid unlawful practices.
Compliance is particularly important for a small business since it can help to protect its assets and people, especially if growth is predicted. In addition, small businesses are more at risk from the effects of non-compliance, including fines and sanctions.
Different industries and sectors can have specific regulations that apply to activities, so companies must stay informed to ensure compliance is followed. We discuss three important steps every small business should take to make sure compliance is followed.
Complying with finance regulations
Keeping on top of finances is not only beneficial for making informed decisions and achieving long-term growth, but it is also a legal requirement. Small businesses must comply with various rules around record-keeping, accounting, payroll, and tax – not to mention dealing with HMRC.
Failure to follow these regulations can lead to harsh penalties or interest charges being brought against the business. In certain industries, particularly those that are heavily related, it could result in staff not being licensed to offer particular services.
Small businesses do not always have the resources to vigilantly monitor their finances, which is why outsourcing accounting services is a popular option. This way, companies have access to expertise and can easily stay ahead of industry challenges.
Complying with GDPR regulations
The General Data Protection Regulation (GDPR) governs how businesses use and process personal data to provide consumers with greater protection. GDPR affects just about every aspect of an organisation and must be complied with to avoid a significant fine.
If a small business handles personal data, it must demonstrate first that consent was given. Additionally, the business must explain how the data will be used and how it will be protected.
Access to the data should be provided to the necessary individuals for them to review, amend, or challenge the practices of the business.
Complying with health and safety regulations
Compliance with health and safety is paramount to ensure employees are provided with a safe working environment. A small business that is health and safety compliant can rest assured knowing it reduces the risk of fines, prosecution, and reputational damage.
To comply with health and safety regulations, small businesses will need to conduct a risk assessment of their activities to find out where action is needed. This is a must if a business has more than five employees, and needs to be in writing. In addition, a health and safety working policy will be required.
Depending on the industry, display signage or posters may need to be put up and a record kept of any accidents or similar incidents.