It’s no secret that there is no shortage of regulations being imposed on companies from all angles. These regulations encompass everything from taxes, labor laws, advertising, commerce, environmental practices and everything in between. Essentially, they will always be a part of your business dealings and you have to be compliant in all aspects to avoid fines or penalties.
How does anyone do it? Well, that’s a great question with, frankly, an answer that can go on for days; however, there are some basic foundational steps you can take to begin ensuring your company’s code compliancy.
Know the Specifics and Statistics of Your Company
While this may seem redundant, it is incredibly important to know your company from the inside out because many financial, labor & economic codes will be affected by this. For example, the tax brackets for a small ice cream shop with 5 employees will be significantly different from a multi-national corporation with 30,000 employees. So, what should you know about your company? Well, yet again, the list is quite long but some specifics include:
- Size (number of employees)
- Net worth
- Average annual income
- Distribution (local, national, international)
- Product output (how much do you produce in a year)
- Expenditures/overhead costs
- Suppliers/vendors
- Equipment usage (what you need/use to keep operations going)
Know Your Primary Industry and Cross-Over Industries
This is one of the biggest areas you need to understand when it comes to regulations and remaining compliant due to the number of industry-specific departments there are imposing rules on business owners. First, you must understand your primary industry and make a list of all entities or government agencies that will do compliance audits for that specific area of business. Second, you must find out all the industries your company’s dealings bleed into and list all the entities and agencies that are in charge of those areas. While some companies don’t have any industry cross-overs, many do. When crossovers happen, it is important to understand the degree of the cross-over and what areas of your business are affected by the secondary industry.
Example:
A helicopter company’s primary industry is aviation. So, they must be compliant with all FAA (Federal Aviation Association) rules and regulations. This company, however, also has defense contracts, medical contracts and forest fire-fighting contracts. That means they will also likely have to be code-compliant with the Department of Defense, Department of Health and Human Services and the National Park Service, to name a few.
Get the Appropriate Certifications and Licenses
Once you establish which agencies and departments you’ll be reporting to for compliancy, it’s important to get the certifications and licenses that they require. This will not only be part of the regulatory process, but it will help to educate yourself and your employees about the regulations that you must adhere to in order to keep your company in the clear. Understand that not all businesses will require certifications or licensing for all employees―a retail chain is not going to require the salesmen to be licensed in HAZMAT procedures, but that is of the utmost importance for some members in the oil business. And, of course, all of this all ties back into knowing your industries and presiding regulatory agencies.
Discuss Regulations with the Three As―Advisors, Attorneys and Accountants
Finally, because of the inundation of rules that flow down to businesses every day, it’s best to talk with individuals who can help ensure you’re within your legal operating basis. Advisors who either work with or within the departments you report to can help you gain a clear understanding of what is specifically required of you. Attorneys can help ensure that legally you are adhering to all the local, state and federal laws required to keep your company compliant. Finally, a CPA can help you understand what financial codes you need to stick to and ensure that you are assigned to the appropriate tax bracket and all state and federal taxes are taken care of.
Need more ideas on how to keep your business up-to-date on regulations? Call us at Beaton Accounting today―we’re here to help! 631-921-6894
Have a question or topic you wish we’d cover? Email us at info@beatonaccounting.com and we’ll be happy to cover it!