Business compliance as a service is a generic term for how efficiently a business follows the rules and regulations governing its industry. No one begins a business with the idea of being an employee. But over time, as your business grows, so do you bring employees along the way. While it is always best to hire people who start out with the same intentions as you – that is, to add value to your business – there are things you can do to help them become more compliant with your own goals, as well.
When hiring employees, make sure you get annual training and orientation.
Some may already be compliant but may not realize it. And even some compliant individuals can inadvertently fall short. It’s especially important that all of your employees understand your business compliance policies and procedures. Your training sessions should include not only general employee knowledge about company policies, but specific topics such as alcohol testing and work/business relationships.
Once your employees are in place, there are still several ways you can help your business comply. It’s always a good idea to establish a corporate veil or reputation management policy. For example, should your business clients require written letters or other types of confirmation before doing business with you? Setting up a good-standing policy will allow your business clients to feel comfortable doing business with you, while also ensuring that your business maintains good standing with the regulatory agencies that govern your industry.
The Small Business Administration boasts several web sites that provide assistance to small business operators. Among them are the SBA’s Small Business and Commercial Compliance webpage. Here, business owners can learn about the various steps they must take to become compliant. Among the topics they will learn about are:
Filing Annual Exhibits. To be considered compliant, businesses must file Annual Reports
with the Securities and Exchange Commission detailing their financial information for the previous year. The Annual report can include the following information: the business operations; income statement; balance sheet; and statement of comprehensive income. The Annual report also must state that industry categories the company falls into, as well as the percentage of revenue that comes from those industries. Similarly, companies must file a Current Portfolio (CP) report that highlights their current financial performance relative to the portfolio as it exists at the end of the year.
Filing Correct Financial Reports. This is perhaps the most important aspect of business compliance. To make sure that you’re doing everything legally permitted by your state or federal regulator, you need to make sure that your annual reports and financial statements comply with all applicable laws. In particular, you must make sure that all your financial receipts and payments to meet the IRS’ requirements for filing tax returns. In addition, there may be tax obligations specific to your industry that must be met. Additionally, there may be legal obligations specific to the way that you obtain and retain clients, which are not addressed by your broker’s insurance policy.
- If you find yourself facing criminal charges stemming from an investigation, be sure that you’ve properly filed your company’s compliance documents
- and that you understand your legal obligations in those matters.
- For example, when faced with a federal investigation, you must file a declaration with the U.S. Attorney General that you are neither guilty nor liable in the eyes of the government.
If you are facing state investigation, your broker must also submit documentation certifying that he or she is not involved in any wrongdoing or fraudulent activities. The broker is still required to advise clients of the full extent of any potential liability. If the state investigation determines that there is a valid cause to suspect fraud or other criminal actions, your business may be asked to turn over evidence and other information that would otherwise be considered private, confidential, and protected under attorney client privilege.
As an employment hero, you know that good employees always follow the law and good business practices. Therefore, your first responsibility as a business compliance professional is to make sure that your employees are following all employment policies and procedures. That means you need to make sure they have updated anti-fraudulent training materials on the company’s part, that they follow up with their clients and have provided any information they’re legally entitled to in a timely manner. Then and only then should you consider using a business compliance consultant to help your small businesses become more compliant with the government and our overall laws.