Objective: The purpose of this write up is to identify and understand the need for statutory compliance services for a business. This article provides some initial insights on statutory compliances services that are offered by global companies.
History of Businesses in India:
In the yesteryears, businesses were relatively easy to operate. There was a controlled environment and a reasonable legal framework (Licensing and Permits) that governed and regulated the operations of each business.
Regular audits and inspections took place and the media was a little suppressed and not very proactive.
The Scenario now
The advent of globalization has essentially opened up a lot of opportunities for businesses to expand their horizons. However, this has increased the complexity of operations. The regulations also have undergone a sea change to keep up with the new challenges. The media has now become a powerful force that has a keen and watchful eye on all things newsworthy.
The regulatory bodies now have their hands full to first formulate new laws or amend existing laws or acts to incorporate the varying business landscapes. The other important task is to ensure compliance to these new laws. The regulators are also now better equipped for these new tasks due to adequate technological support.
What is statutory compliance?
The word statutory means “of or related to statutes” – we know this as rules and regulations. Compliance means adherence. Thus, Statutory in simplest terms, means adhering to rules and regulations.
In order to cope with the demanding regulatory environment, it is vital that organisations sit up and take notice of the different laws. They need to devise efficient and effective ways to maintain compliance to these laws and minimize their risk.
Non- compliance has resulted in well-publicized failures and heavy punitive damages and losses to many organisations especially since 2011.
Some of the advantages of having compliance as one of the focuses of the management are outlined below:
- Increased awareness about compliance allows the management to mitigate risks involved in non-compliance and prevent any setbacks.
- The organization can have a competitive advantage as they have a proven track record of being fully compliant and results in good reputation and goodwill
- The risk of adverse incidents is lowered. If such incidents take place, the gravity of the situation is lessened, due to the compliance system being in place.
- Security of Personal data of customers and employees are addressed in the regulations and if addressed properly, give rise to employee and customer loyalty.
Thus, it is evident that organisations that undertake a proactive approach to compliance management almost always have a safer, efficient and more trustworthy organization.
Risk of non compliance:
Companies that do not conform to the rules and regulations specified by the authorities run the risk of non-compliance and this may have heavy implications on the bottom line of the business.
Some risks of non-compliance are outlined below:
- Penal actions and financial losses to the organization.
- Loss of reputation and business integrity.
- Customer loyalty is heavily impacted.
Statutory Compliance Management:
With the increased complexity of today’s business environment, it becomes a very challenging and a monumental task to be in tune with the operational needs of the business. At the same time, not paying attention to it may result in a lot of damages to the concern.
To prevent this and to provide adequate support, an organization can seek the help of Statutory compliance experts, whose main focus is to help organization remain 100% compliant with the ever – changing regulatory environment.
Such statutory compliance management companies like ADP have a much deeper understanding of the regulatory setting and provide specialised services to organizations. They streamline the process right from the day to day maintenance of prescribed registers and documents to the year end calculations and filings along with reports.
Following are some of the tasks performed by statutory compliance management organisations:
- Licensing and Registration
- Maintenance and upkeep of requisite registers.
- Calculation of liability and payment thereof.
- Preparation and Submission of Periodical Statutory Reports
- Attendance of Periodical Statutory inspections held by the Govt. Officials whenever required
In the present business scenario, a lot of companies have started to pay close attention to compliance management and have recognized the risk as well as the rewards of being fully compliant.
But, most compliance initiatives usually begin as projects to meet compliance deadlines for a specific regulation or a hasty realization of a mistake in calculation. This is a reactionary approach to compliance.
However, compliance is not a one-time event. Organizations need to take a proactive approach and reengineer their compliance programs to make them more efficient and effective so that they can concentrate on their core offerings.
Statutory compliance organizations certainly take the load off your back by offering their expertise on the rules and regulations required for a business to follow. This enables the company to achieve their goals smoothly.
About The Author: The author, Stella Lauren has contributed this post, who writes on organization growth and sustained development in the competitive business environment. Please note that the above information constitutes a General guideline. This weblog does not represent the thoughts, intentions, plans or strategies of my employer. It is solely my opinion.