With the advent of GST in India, GDPR rules in the EU, we see regulators across the world approving new statutes to establish better governance and administration over illegal activities. These laws aim to streamline various processes by establishing controls on the flow of funds.
Small companies find it difficult to keep up with all legislations by creating internal control plans. It is difficult to document & prepare financial statements, file applications & keep up with the deadlines. Also, one has to follow up with officials & client requests, and manage the third party auditors. Often being compliant is considered as a “cost” by the various companies due to the hassle and limitations of the traditional methods of GRC.
Thus, due to operational overload, companies tend to postpone compliance matters, ignore and forget the requirements of law. This, in turn, results in penalties and fines which are more severe than the cost of compliance.
Globally, a breach in compliance matters are not left alone without follow-ups by the authorities. It creates a reputational and financial risk to companies and to individuals at large. “NOW” is always the right time to start paying attention to the regulations and to use all the possible resources that a company allows to comply with the requirements of the law. Using VComply helps the company as portrayed in the infographic below.
We present you a few tips to you facilitate gaining knowledge of legislation and implementing it internally:
- Legislators across the globe have websites which give out regular updates. One should enroll to such websites to gain timely access to this document. Moreover, this will enable you to know when there is a new regulation that concerns you and what are its requirements and deadlines.
- There are various seminars, conferences or webinars held all over the world to update companies and individuals with various new legislation. You may access the information here.
- Quora has summaries, gist prepared by professionals which could be referred to gain insights on the topic before a through reading.
- Making changes in Internal controls while there is a change in the statute is a must.
- Communicating and training the staff on the new legal requirements is an important step. Not only the Management and Compliance Officer is responsible, but every entity who works in the organization has to be responsible.
- A database which has regulations, standards and internal controls should be in place. VComply’s compliance library is a rich source of such information. It contains the original link of the law, due dates and the relevant format if any
- One should update the KYC documents of the clients and vendors on a regular basis to avoid redundancy.
- Communicate to the clients on the new statutory requirements and make it clear for them that respecting the law is not optional. E.g. Under the new GST Regime, one has to think twice before dealing with unregistered vendors due to the repercussions it causes to ITC. Thus, one should set deadline even for third parties and quantify the risks of transacting with them.
- Documentation is important. It acts as a legal proof. Document every plan, procedure and policy and update it regularly. Also, you may refer this article to know more about documentation.
- Every company should have a Compliance Officer. One should appoint a person in charge of your company’s compliance operations and have her/him trained.
Technology is evolving and various tools like VComply are available in the market. It serves as a platform to integrate all the functions of an organization. Thus, it helps the management to monitor all the internal controls, regulations and standards. One can gain valuable insights to take corrective actions.Add to favorites