To err is human. But that doesn’t mean that you shouldn’t try your best to avoid mistakes, especially in business. The best approach is to be proactive and avoid the top, most common business compliance mistakes that you can potentially foresee.
No business should wait to run into trouble before getting its ducks in a row. This can be achieved by remaining up to date with developments in the various industries and legislation while also staying ahead of any developments in your company that might cause you to become non-compliant. You will need to update your policies and train staff on an ongoing basis.
Not Keeping Up with the Laws
The simplest mistake that some businesses make is to neglect staying up to date with developments within their particular industry. What’s more, changes in other industries may have a knock-on effect. This can be health and safety laws, privacy laws (remember the introduction of POPIA?), changes to employment equity laws or even changes in taxation like VAT increases.
Along with these, your business might need to have policies that address the company’s stance on certain factors, as well as how to behave in certain situations. These policies may include:
- Sick leave policies
- Employee privacy laws
- Hiring regulations
- Workplace safety and health laws
- Payday rules and payroll deduction rules
- Record-keeping requirements
- Overtime pay laws
- Anti-discrimination and anti-harassment laws
2. Dodging Safety Regulations
Occupational Health and Safety applies to everyone. It protects the employers, employees, and even the customers. You must, therefore, ensure that you regularly communicate safety rules and regulations to staff members. This doesn’t just mean someone who might be working with dangerous equipment and needs to have a hard hat. It could also mean briefing your staff on the evacuation protocols that are in place for potential fire outbreaks.
Ensure that your staff knows what to do during an emergency. You can also equip them with the right uniforms and work attire that will keep them safe. It will be a mistake not to.
3. Bad Recordkeeping
Recordkeeping might be tedious, but doing little by little every day helps you stay up to date with your administrative tasks. If you don’t, you risk falling behind, and that is a huge problem.
Avoid this common business compliance mistake by regularly checking that all your paperwork is in order. The correct forms should be in the correct folders, all the important information should be up to date, and it should be accessible to the relevant person.
What makes this extra important is that many regulating bodies will request some of these files to verify information. Your bank, for instance, might also ask for certain information if you are applying for a loan.
Remember, the safe storage of your files is just as important as keeping your records up to date.
4. Forgetting Regular Audits
Compliance, as alluded to earlier, is a continuous process. It never ends. As a business owner, you have to do regular checks to ensure that every part of your business is still compliant. This means internal and external audits that ensure safety to legal compliance for your financial health.
Check the following in your audits:
- That policies are updated
- That admin and bookkeeping is up to date
- That all your tax certificates are on file
- That health and safety rules are followed
- That safety equipment is working
- That you are following any new legislation that might affect your business
5. Failing to Act When You Are Non-compliant
Since many businesses have a reactive approach to compliance, one of the most concerning mistakes any entrepreneur can make is not to take action when they know that they are not compliant.
As soon as you find out that you are non-compliant, it is vital that you immediately take action. File any outstanding tax returns, update any out-of-date employee manuals and invest in any missing pieces of equipment or safety requirements.
Take note, it might be worth it to consider sending employees to training when you are also improving your compliance.
When you work hard in rectifying the various issues that might arise in your business, compliance should be easy to obtain.
