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6 Changes to Improve Small Business Compliance with Government Regulations

— February 22, 2024

Utilizing technology to automate documentation and compliance monitoring streamlined the process. ~ Ahmad Faraj, Owner, Principal & Senior Criminal Lawyer, Faraj Defence Lawyers

Navigating the complexities of government regulations can be daunting for small businesses, so we’ve gathered insights from top legal and business minds. From implementing cloud-based tax software to enhancing record-keeping with digital tools, here are six transformative strategies shared by Managing Consultants, CEOs, and Founders on improving compliance.

  • Implement Cloud-Based Tax Software
  • Adopt a Proactive Compliance Stance
  • Integrate Compliance into Business Operations
  • Simplify Legal Tasks for Compliance
  • Establish Internal Compliance Audits
  • Enhance Record-Keeping with Digital Tools

Implement Cloud-Based Tax Software

In our consultancy, we once advised a small e-commerce business struggling with sales tax compliance across multiple states due to the complexity of varying tax laws. The breakthrough came when we implemented a cloud-based tax compliance software that automatically updated tax rates and rules in real-time and integrated seamlessly with their sales platform. This not only ensured they remained compliant, but also significantly reduced the manual work involved in tax calculations and filings.

For other small businesses facing similar compliance challenges, I recommend evaluating and investing in specialized compliance software tailored to your industry’s regulatory requirements. It’s crucial to choose a solution that offers scalability, real-time updates, and integrates well with your existing systems to ensure both compliance and operational efficiency.

Niclas Schlopsna, Managing Consultant and CEO, spectup

Adopt a Proactive Compliance Stance

In our experience, the implementation of a comprehensive compliance management system enhanced the adherence of a small business to government regulations by a substantial margin. By performing an exhaustive regulatory audit, we were able to identify business-specific requirements. Then, in addition to developing individualized policies and procedures, we conducted routine employee training sessions. Utilizing technology to automate documentation and compliance monitoring streamlined the process.

An alternative perspective entails adopting a proactive stance by remaining updated on the dynamic nature of regulations, tailoring compliance strategies to individual needs, and leveraging technology to streamline monitoring processes. Consistent vigilance and revision of policies guarantee sustained adherence. By implementing this approach, legal risks are not only reduced but also a culture of compliance is fostered within the organization; this is consistent with our dedication to upholding legal standards and regulations in the consulting sector.

Ahmad Faraj, Owner, Principal & Senior Criminal Lawyer, Faraj Defence Lawyers

Integrate Compliance into Business Operations

In my role at DGR Legal, we frequently encounter small businesses facing challenges with regulatory compliance. One practical change we’ve implemented, which could be universally beneficial, involves integrating compliance into the business’s operational DNA from the beginning. Instead of viewing compliance as a periodic or reactive task, we advocate for and help implement a continuous compliance model.

This model uses technology to automate and monitor compliance tasks, ensuring businesses stay ahead of regulatory changes. For example, we’ve helped companies set up systems that automatically update them on relevant legal changes directly impacting their operations. This proactive approach allows businesses to adjust their processes in real-time, significantly reducing non-compliance risk.

Moreover, we emphasize the importance of education and training for all levels of the organization. Businesses can foster a culture of compliance by ensuring that employees understand the importance of compliance and the specific regulations that affect their roles. This helps mitigate risks and empowers employees to identify and address potential compliance issues before they escalate.

Adopting these strategies requires an initial investment in technology and training, but the long-term benefits, including reduced legal risks and enhanced operational efficiency, far outweigh the costs. This approach has proven successful for our clients at DGR Legal, and it can be adapted by other small businesses to improve their compliance with government regulations.

Alana Gibson, Chief Operating Officer, DGR Legal

Simplify Legal Tasks for Compliance

All business owners need to take care of law compliance to avoid hefty fines and penalties and foster a happy and productive workforce. As a legal process outsourcing (LPO) provider, in my experience, the solution is to simplify and optimize legal tasks, which can also significantly improve small-business compliance.

I once helped a client, which was a charming local bakery churning out delectable pastries. But the owner was overwhelmed by the mountains of paperwork for HACCP (Hazard Analysis & Critical Control Points) compliance. She spent hours filling out forms, worried about missing deadlines, and constantly second-guessing her understanding of regulations.

We assigned her a dedicated team of our food-safety-savvy attorneys. The project started by expertly tackling permit applications, demystifying HACCP, streamlining paperwork, and establishing ways for proactive updates. We researched and drafted all necessary permits (like food handler licenses and operating permits), ensuring accuracy and timely submission. Our team created a user-friendly digital HACCP plan with flow diagrams, which illustrates the entire food service operation from raw material receiving to the final serving of the food, tailored to her specific bakery processes. This also included identifying potential safety hazards of working in a kitchen, setting critical control points, and establishing monitoring procedures. We then provided training materials and conducted training workshops for the bakery staff on food safety regulations and best practices. Our team also handled all record-keeping, maintaining temperature logs, equipment cleaning logs, and employee training records on the cloud to make the data secure and readily available. We also established an automated email chain for the owner to receive alerts about upcoming deadlines and regulatory changes, keeping her calm and confident.

The results were sweeter than any pastry. Our client was able to reclaim her time and peace of mind. She could focus on baking her award-winning croissants while her ‘compliance cavalry’ kept her paperwork ship sailing smoothly. The digital HACCP plan streamlined internal processes, boosting food safety and staff confidence. And best of all, the client no longer lived in fear of audits, because now, her paperwork was in impeccable order.

Aseem Jha, Founder & Head of Customer Delivery, Legal Consulting Pro

Establish Internal Compliance Audits

In my career as a compliance officer and legal advisor, one practical measure I’ve consistently recommended and implemented for small businesses to enhance their compliance with government regulations is the establishment of an internal compliance audit system. This system involves regular audits of business practices against the relevant federal, state, and local regulations to identify any gaps or areas of non-compliance. By making this a routine process, businesses can proactively address potential regulatory issues before they escalate into fines or legal challenges.

Plaintiffs Say Teva Willfully Withheld Opioid Audit Report
Photo by Bernd Klutsch on Unsplash

For example, working with a small manufacturing company, I guided them in developing a quarterly internal audit protocol that cross-referenced their operational practices with the latest OSHA standards. The process involved training a team within the company on compliance matters and creating a straightforward checklist based on the regulatory requirements. This initiative not only helped the company stay ahead of regulatory changes but also instilled a culture of compliance within the organization. The key here is consistency and commitment to understanding the legal landscape, which, in my experience, can significantly mitigate risks associated with non-compliance.

Adrienne Fischer, Founder, Basecamp Legal

Enhance Record-Keeping with Digital Tools

Streamlining record-keeping and documentation procedures is, in my opinion, a useful modification to improve a small business’s compliance with government laws. This entails using document management software, establishing a centralized database, and digitizing significant documents. By doing this, businesses can monitor compliance deadlines, conveniently access and update documents, and promptly reply to government queries. It also lessens the possibility of misplacing important documents or making errors when keeping records by hand. To accomplish this transformation, businesses can train personnel, provide clear documentation procedures, and invest in user-friendly tools. Frequent audits can reinforce compliance efforts by assisting in ensuring that records are accurate and complete.

Neil Davies, Founder and Senior Partner, Caddick Davies Solicitors

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