How To Monitor And Prevent Regulatory Or Compliance Issues

Successful businesses create systems and processes to help manage their businesses. Companies are inundated with requirements from their banks, auditors, financial requirements, and a lot of other regulatory and compliance issues, no matter what type of business the company is in. Some larger businesses devote entire floors in their buildings to work on compliance issues.

How does a business owner or leader deal with all the detail to make sure that the business stays in compliance? The best way is to develop systems and processes and digitizing what has been developed. In addition, the business owner must ensure that there is proper training of staff regarding the systems and processes to make sure that the business is in compliance and stays that way.

If you have been in business for a while, you need to take a good look at where you are with meeting requirements at this moment. A good place to start is to focus on a review of your current systems and processes. Then, look at any times your business has found that it was not in compliance so you can focus on problem areas. If you are a newer business, focus on what the requirements are for your industry and build plans around them, keeping track of problem areas as they arise.

An effective way to review what you have in place is to have each member from your management team produce the compliance items that pertain to their sector of the business. Then, have the team member drill down into the components that need to be complied with, so that no pieces are missed. For instance, in the financial area, bankers usually have bank covenants that need to be complied with. Each part of the covenants has a different requirement that needs to be dealt with that will provide compliance to ensure that the loan does not go into default, or that the bank will not renew the line of credit.

On the manufacturing side, safety issues are part of OSHA filings. Those safety issues for purposes of these filings need to be examined into various components so that any required filings will be complete. The same is true for environmental issues, which are necessary to keep compliant with EPA regulations.

Rather than focus solely on compliance, your systems and processes should be designed so that there are no safety incidents, no hazardous spills, no EPA issues, and no logistics issues that would result in any type of regulatory problems. The business owner must shed light on the potential issues that could occur and make sure that the systems and processes, along with the proper training of the team, may prevent the issues from occurring. While no company is perfect, the business should always be striving for improvement and finding ways to maximize productivity and minimize problems including legal issues. This will save time and money in the long run.

There are vendors that can take your documentation and build it into a digitized information platform that will allow for easy access to this data to allow it to be shared with the rest of the team. By using this data, it will be easier for businesses, especially manufacturing companies, to comply with regulations and put in place best practices for that company to operate.

Compliance can be complicated, but rather than look at it as a burden, it should be regarding as a way of forcing you to use systems and processes to not only satisfy regulators, bankers, and others, but as a way of building best practices to have a more efficient and productive company.

If you don't have an in-house legal staff to help you navigate the changing laws and requirements, consider an outsourced general counsel service that can easily collaborate with you on these issues on an ongoing manner as they learn your business and become an essential part of your team. It is an often-overlooked asset for small and medium size businesses but becomes a very cost-effective solution to keep legal issues under control including compliance.

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Denice Gierach

Gierach Law Firm

Denice Gierach is an attorney, CPA, Northwestern University business master's graduate, and has owned several businesses from real estate to manufacturing. She is the lead attorney at Gierach Law Firm in the Chicago area. With more than 30 years of experience, she has been a respected and sought-after resource for businesses looking to grow, sell, solve problems, and succeed long term. Her insights across business areas gives a fuller lens to business issues and solutions, and helps businesses grow and succeed with less time spent on legal issues and other time-consuming problems.

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