(Newswire.net — December 20, 2017) — If you’re in business, you know how important compliance is. Although it can cause plenty of headaches for your operations, it has many benefits as well. For example, SOX compliance benefits can ensure you complete better audits and they can help you identify peak operational performance earlier rather than later.
Well, it turns out that keeping in compliance with the latest rules, laws, and regulations has another important benefit—it can help you save money.
The Cost of Compliance
Compliance is expensive. For large companies, costs associated with compliance can be as much as $5.47 million a year. Even smaller businesses may end up paying over $80,000 in regulatory costs in their first year.
Although many businesses dream of dropping their compliance standards in the hopes of saving money, it turns out that you’ll pay even more in the long run if you don’t comply.
The Cost of Noncompliance
First, there’s the immediate costs of noncompliance. Large companies end up paying around $14.82 million each year. Small businesses may pay over $30,000 over the course of a few years if compliance isn’t kept. That’s a lot of money!
Although some of these costs are due to fines that are issued by governing bodies, many of the losses can end up causing you to lose money over time. You may experience business disruptions due to non-compliance and you may experience a drop in productivity.
Just because you don’t get caught doesn’t mean you aren’t losing money. If you’re letting something slip through the cracks, the productivity of your company may drop over time, causing you to lose tens of thousands of dollars over the years.
Try and Understand Where Regulations Come From
Although compliance and regulations can be very frustrating, it’s clear that in today’s business world, it is important to engage in risk management and compliance techniques.
When writing those checks that you think would be better spent somewhere else, it can be very helpful to understand where the regulations come from. Compliance regulations can prevent or reduce the instances of:
- Theft
- Fraud
- Misrepresentation
- Bodily injury
- And more
For example, when electronic appliances were first being sold, there were no rules and regulations on their development. Because there were no regulations, many customers ended up getting shocked. Some appliances even started fires.
Today, those appliance companies are required to test products to ensure they are safe and reliable for consumers. If something unexpected does occur, recalls are made and those who are affected may get restitution. Knowing that a company complies to governmental regulations can also boost customer confidence and ultimately increase your bottom line.
Although it may be tempting to skip out on some of the costliest compliance standards, you’ll actually end up paying more in the long run by ignoring them. Make paying for compliance less of a burden by understanding why those regulations are there and budgeting for them so you have the money to prevent problems from developing in the first place.