Top 5 Indicators That Your Business Needs Automated Compliance Management
There are multiple digital platforms that are cost-friendly and can help you organise your compliance requirements effectively. A company hardly needs three to four weeks to have the automated platform onboard. This automated compliance platform will give you greater control over the daily operations and will significantly reduce human error.
Compliance management is a tricky issue for any company. For organisations in India, compliance management becomes even more complex, requiring the dedicated services of expert compliance professionals. India is known for its plethora of compliances, filings and acts that run into hundreds and thousands, with each state having its unique set of laws and regulations to govern the system.
On top of it, most companies manage their compliance in an ad-hoc and people-dependent environment, which further increases the chances of non-compliance. The Companies Act, 2013 makes management and the board liable for any non-compliance. Despite this, many companies do not possess the appropriate tools, knowledge or human resources to invest in compliance management solutions.
The only way to solve the problem of managing compliance is by digitising compliance management. This is the most crucial step that a company can take to solve the problem of non-compliance once and for all. So, let us check out the five signs that your business requires automated compliance management solutions.
1. Consistently missing out on compliance
Compliance rules for Indian organisations change from state to state. So if a manufacturing industry has presence across multiple states in India, then they have to deal with hundreds of different permissions, licences, registrations, maintenance, consent orders, renewals, challans, returns and many others, for each state. Out of these, approximately 30 to 35% of these industry compliances are in the high-risk category and need accurate and timely execution, failing which can lead to financial, reputational and operations risk for the organisation.
Consistently missing out on compliance is not a healthy sign for a business. Over the long term, such negligence will affect your business and everybody associated with your business. Plus, flouting grievous compliance norms can also result in seizure, sanction and legal turmoil which can affect you personally. Thus, credible steps need to be taken in bringing compliance process automation to mitigate the risks and ensure smooth business operations.
2. Missing out on legal updates
India has a highly dynamic, compliant and regulatory ecosystem. Here, laws change frequently and quickly resulting in innumerable changes in the given year. Most of the time, these updates result in a change in interest computation, duty structures, important dates, penalties, forms and many other aspects which require appropriate and timely changes to ensure accurate filings, registers and returns.
Now, if you miss out any legal updates knowingly or unknowingly, you inadvertently commit a commission error or wrongdoing. This is not healthy for business. Compliance automation will help you prevent such problems altogether, as your compliance software will get updated automatically as and when the authority issues any regulatory or compliance changes. It will help you stay on top of the latest legal updates resulting in the continuation of smooth operations.
3. Receiving many missed compliance notices
The Indian government is making a focused effort on going digital. Under the “Digital India” campaign, many government departments and functionaries have already embraced digitisation, and organisational compliance was one of those first batches of government departments to go digital. This digitisation has enhanced the department’s capacity to identify omission wrongdoings (missed compliance) and commission wrongdoings (inaccurate/incomplete compliance).
So, if you are facing many such compliance notices, then your manufacturing enterprise, either knowingly or unknowingly, is not following certain basic industry compliance requirements. Too many notices are not a good sign for a business, as it will hamper production and operations, and can lead to a forced shut down by the authority. And it is neither necessary nor remotely possible for a business owner to know every compliance requirement. Automated compliance solutions can help you wade through this intricate web of compliance.
4. Having operations in multiple states, cities or UT
In India, the rules of compliance change with every state, and multiple bodies govern these obligations across different states. You have the local government, Union Territory regulations, state government and finally the central government — each with their separate list of compliance and regulatory obligations. Now, if your business is located in different states or union territories, then different rules and regulations will apply to each of your enterprises in their respective locations.
Moreover, as your manufacturing footprint across states increases, so does the complexity of the compliance regulations. This exponential increase in the number of regulations can threaten to run down your business for errors or wrongdoings. Therefore, you need the expertise to navigate through this complex web of compliance obligations smoothly.
Most enterprises do not possess in-house expert professionals to manage compliance. In such a case, automation of compliance management is the best solution for your business. It will automatically guide you through the regulatory compliance and warn you from committing any errors or wrongdoings unknowingly. This will not just solve your compliance hurdle but will also increase your efficiency and productivity.
5. Dealing with international clients
In recent years, businesses have enhanced their focus on international vendor compliance. Buyers normally demand that a particular standard be met on risk management, corporate compliance and vendor sustainability standards. Such international buyers hold audits periodically and also seek regular evidence that explains the compliance obligations of the vendor. In the absence of proper evidence or a failed audit report, the vendors run a risk of getting replaced or blacklisted.
Such problems turn serious, if and when they happen. They will hamper the credibility of your business internationally, resulting in the loss of money and reputation. Plus, no other international buyer would like to associate with a manufacturing company that has been blacklisted or replaced internationally for non-compliance. The international market is more strict with compliance than we think. So any act of non-compliance will spell doom for your business.
The answer to this international obligation is automated compliance management. The automation software will make you aware of the necessary compliance and regulations standards of your buyer, and will also ensure that your product and/or services meet the required obligations.
The world around us is undergoing a dramatic change. Technology has become more inclusive and has positively affected our quality of life. In this world driven by technology, transparency and accountability, a compliance management program is the key to any successful business. It can be achieved through digitisation and automation of your compliance management.
There are multiple digital platforms that are cost-friendly and can help you organise your compliance requirements much more effectively. A company hardly needs three to four weeks to have the automated platform onboard. This automated compliance platform will give you greater control over the daily operations and will significantly reduce human error. It will prevent your organisation from falling into the trap of enforcement and legal agencies for non-compliance. And most importantly, it will ensure that compliance becomes an integrated part of your business.
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