Regulatory Compliance – What is it and why is it important?
Regulatory compliance can be defined in many ways depending on the prevalent rules in an industry. However, it generally refers to following a set of legal standards and policies to fortify your presence in the market.
Compliance can be categorized into two types.
- Internal compliance deals with following standards set by the internal management of a company.
- External compliance has to do with following regulations set forth by external legal or regulatory authorities.
Whichever the kind, businesses need to stick closely to their policies so they can maintain the credibility of their operations. It is important to follow the standards set by federal agencies and have your processes properly documented.
Doing this helps you survive sudden investigations by regulatory authorities. Furthermore, it also prevents you from ending up with a tarnished brand name.
One common issue in achieving compliance is the extra costs that one incurs from streamlining their work operations. However, sidestepping these costs and not complying with industry standards is far more damaging.
Therefore, it is key to meet industry regulations if you wish to stay in the game. For this reason, start by evaluating your business tasks and see where they detract from industry standards.
Businesses widely use automated tools to help with the compliance process nowadays. These tools not only save you precious time but help devise a schedule for compliance activities and send regular alerts to follow through the schedule.
They also generate actionable reports to assess the compliance practices of a business. With automated asset management compliance system by your side, you have a greater chance of achieving your targets.
Challenges in gaining compliance
Meeting asset management compliance is not an easy task. It requires a business to implement strict policies and track their performance on a regular basis. Often times, it also entails major structural changes in your business workflow.
Here are the challenges businesses face while documenting their workflows to gain compliance.
- Changing compliance standards: Evolving market trends require companies to constantly re-evaluate their quality standards. Without a regular policy review, compliance is hard to achieve.
- Inadequate data recording: Without a system to record and track workflows, meeting regulations is challenging. You won’t be able to generate workflow reports and your best data will go to waste.
- Fragile database systems: Documenting workflows will not benefit you if you don’t have a reliable system to store all that data. Organizations with fragile databases expose their internal workflow data to security breaches.
- Inconsistent baseline processes: It is important to have consistent baseline protocols and compliance documentation standards. This is particularly challenging for widespread businesses.
You can sidestep all the aforementioned challenges by using asset management compliance software. It offers various benefits from extensive data security to streamlined workflow tracking processes. With
It keeps your asset records updated so you can run regular audits. This helps improve workflow transparency for meeting compliance standards.
Key guidelines to achieving regulatory compliance
The best way to overcome compliance roadblocks is to devise a strategic plan of action and follow it one step at a time. Use these guidelines to meet compliance standards set by regulatory authorities.
1. Understand legal requirements
The first step is understanding the legal requirements of regulatory bodies. It is key to study the laws that govern each department in your company and develop internal policies accordingly. Laws covering your accounting policies would be different than laws for human resource management so it’s important to note these differences.
These policies should then be communicated to the Head of Department and incorporated within the said department.
2. Appoint a compliance management team
Given the importance of compliance management, it is crucial to appoint a separate team to overlook this process. The team shall include a senior officer to design, implement and monitor policies and operations related to compliance.
It is the responsibility of the compliance officer to communicate such policies to the head of each department. They should also hold the employees liable if they do not follow the set standards.
3. Organize regular audits
Once you are done with internal risk management, the next step is to ensure third-party verification. Hire external auditors to identify problem areas in your company’s compliance that you are oblivious to.
Regular audits open more room for improvement in business workflows and add credibility to your practices. They can be conducted annually or semi-annually, whatever suits the business.
4. Automate data entry procedures
Perhaps, the most important step in this pursuit is to collect data to analyze workflows. You should ensure that the data you gather is accurate or your entire compliance plan will go haywire.
An asset management compliance system eliminates the chances of human error and guarantees accurate data entry. You can run barcode scans for your assets so asset data can be quickly updated without errors.
A well-grounded asset management compliance system also assists in tracing ownership of assets in high-risk situations.
5. Regularly monitor compliance
Implementing best practices does not alleviate the risk of non-compliance alone. You need to assess your performance on a regular basis. For this purpose, have your compliance team monitor the strategies they devise to see if your current plan actually benefits the business.
Investing in asset management compliance software to further streamline performance monitoring is even better.
6. Set up disaster planning
The unpredictable nature of physical or online disasters makes it essential to adopt a data recovery plan. You should develop an action plan to safeguard and recover sensitive company data in the event of such disasters.
Separate online encrypted backups can prove quite useful in this endeavor. Such a system should only be accessible to the senior management to minimize as much data loss as possible.
Centralize your compliance practices with asset management compliance software
Maintaining compliant business assets and work processes can be a handful as the legal space is constantly evolving. For this reason, follow your compliance plan closely so you can tie all loose ends in a timely manner.
You can centralize all your compliance efforts with a dynamic asset management compliance system.
In addition to that, have your legal department oversee the latest trends in the regulatory environment. Encourage them to coordinate with the compliance team so they can modify their strategies based on the current best practices.
With asset management compliance software, you can keep your teams coordinated, your recent developments and compliance practices in check, and your business growing to new heights.
Read More:What is Asset Management?
EZOfficeInventory is the leading asset management software. It allows you to simplify your operational workflows and conduct seamless audits so you can meet your compliance goals. We offer a free 15-day trial – no credit card required!