Attention: Entrepreneurs – Rethink Your Mainstream Attitude about Compliance

Attention: Entrepreneurs - Rethink your mainstream attitude about compliance
No matter where you operate your small business in Canada or the United States, there are government standards of compliance required that govern everything from the kind of financial records you need to keep to how you produce and measure certain products and services, what you pay your employees, and how you create a safe working environment.
These are the source of frustration and a considerable amount of complaining, but if you stop to consider why the rules are there, you will soon realize that you benefit from them too.
For example, safety regulations reduce workplace accidents and lost time, discrimination and harassment regulations ensure a more respectful and productive work environment, and business licenses regulate the standards of business. Financial records compliance often means that you have up-to-date financial data that allows you to make better business decisions.
The word “compliance” in effect means the steps that your business must take to meet your legal obligations.

Why you can’t avoid compliance issues

In counselling small business owners about compliance issues, we are always asked if they really must pay attention to all the government-imposed rules and regulations that govern what they do.
Some industries, such as agriculture, forestry, mining, oil and gas, telecommunications, and health products in particular, are federally regulated, and many others are subject to provincial or state legislation.
Do you have to comply?
Undoubtedly. Failure to do so places you at risk of fines and penalties, work stoppages, lawsuits and serious sanctions that harm your reputation and can ultimately cause your business to close.
There is an old saying that the two things we can’t avoid in life are death and taxes. For the business owner, add a third and that is compliance.

Ignorance of the law is no defense if you get caught

It is a legitimate concern for many small business owners that some of the legislation covering how they do business is so complex that they don’t really understand it all.
Even though many governments are actively seeking to reduce some of the red tape of business regulations, you cannot ride through non-compliance by apologizing and saying you didn’t know any better.
Time and again people try that, and it just doesn’t fly in the courts.
That is why if you are setting up a business in a highly regulated industry, you have to get professional help right from the start.
In Canada, for example, the Government of Canada website offers detailed information on all manner of industry standards. In the United States, the Small Business Administration offers detailed information on compliance issues.

Use the information on compliance to your advantage

Don’t let issues of compliance be a one-way street in your business. Make a genuine effort to see how data you have to collect on compliance issues can be used to your advantage.
For example, in Canada all small businesses with income in excess of $30,000 a year must pay quarterly Sales Tax and file the paperwork to support the amount.
This is a great way to give yourself a full update on your revenue four times a year. It’s a wake-up call if your revenue is falling below the same period last year, or even the previous quarter. Over a period of a couple of years, it is a great way to determine the cyclical nature of your business and make more accurate plans on how to spread out new business over the down times.
Another way to use compliance data is to ensure that once your tax returns are filed each year, take the time to go over them in detail and search for ways that you can learn from the year that has just passed.

Seek insight into your business through your financials

For example, you decided to lease rather than own certain essential equipment so you could expand your plant last year. You wished at the time that you could afford to buy it outright because you felt that would be a better road to take, but the cost of borrowing was prohibitive and it would have taken too big a bite out of your cash flow.
Now you discover that you actually made a better decision to lease because of all the leasing payments that turned out to be tax deductible.
Through searching over your own financials, you get fodder to better run your business.
You can also use it to recognize and act on trends that surface so subtly quarter by quarter that you fail to notice them until you take the time to really go over the statistics you gathered for compliance issues.

Think enhancement of skills when you look at license renewal

If you work in an industry that requires you and your staff to upgrade your licenses each year or two, why not schedule that period of your calendar year to see if enhanced training can be added then? Is there a higher certification you can reach in your profession that will augment the level of your license and make your business more distinctive in its field?
If you must study labeling or packaging compliance issues each year, can that period of time be used to review your current processes and see if you can take steps to be more environmentally friendly or to add a component voluntarily that enhances your product to your buyers?
When you examine workplace safety issues to ensure you are legally compliant with the laws of your province or state, is this a time you could upgrade safety training?
If you try to work with the system as opposed to gritting your teeth and doing as little as possible to support it, it can turn into a positive experience that leads to a better run company over a period of time.
Thank you for taking the time to read this post. Until next time take good care.
This blog is for you and we hope you will enjoy the content.
Please let us know if there are any specific topics you would like us to address in the future.              
Copyright: grafner / 123RF Stock Photo

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Steve Loates

Steve is the co-owner of AIS Solutions and Co-founder of Kninja Knetwork. In 2017, his firm was named Intuit's Global Firm of the Future, the first time the title has ever been awarded to a firm outside of the United States. He has also has been named as one of the Top 10 Influencers in the Canadian Bookkeeping Industry. He has been a small business owner for over 30 years and has helped to develop a number of businesses including bookkeeping, online training, digital marketing, website development, e-commerce and retail. Steve passion is educating and supporting small business and when he is not creating online courses he is delivering workshops and webinars across North America and the Caribbean including presentations at QB Connect, Connected, IPBC, CPA The One and Scaling New Heights.


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