Running a business is associated with many risks. Some of them are risks related to the legal regulations themselves. Tax or environmental regulations establish many unclear, imprecise obligations. On the other hand, penalties and sanctions for violating them are specified in detail and, as a rule, severe.
In particular, deficiencies in the correctness of settlements may result in liability – both of the entity itself and of the staff. This applies primarily to the management board or key management and financial personnel.
At the same time, the number of obligations in terms of the need to report or ensure compliance with tax law provisions in other forms (declarations, records, statements, etc.) is increasing. Importantly, more and more often it is not only administrative authorities, but also suppliers or recipients who verify whether our goods and services meet these requirements.
A natural way to manage risk is to strive to minimize it.
But how to achieve such an effect here? The key word is compliance.
Therefore, the entrepreneur’s goal should be to ensure that their processes and procedures comply with the requirements resulting from the law.
On the one hand, this will help to minimize the risk of errors. Like specific standards and designs within production, the goal is to achieve a process that is as transparent and reproducible as possible.
On the other hand, in the event of a violation of the law, having such guidelines is crucial to demonstrating that it was an unintentional mistake that falls within the normal risk of doing business. And the organization in question has exercised all the required “due diligence.”
Where does compliance come from? The simplest way to say that it comes from action.
It is necessary to organize the processes functioning in a given unit and describe them in the form of specific procedures. They must be properly implemented so that they become part of the “company DNA”. The results of the activities regulated there must also be properly documented.
Will such a process be time-consuming and labor-intensive? If it is well planned and carried out, it will not be necessary.
In the first place, it is necessary to assess the currently functioning processes and procedures. Practice shows that units often carry out many correct activities, although they often do not constitute a coherent system or are not properly documented. However, they are a good basis for the preparation of target solutions.
Draft procedures should be evaluated and discussed among all stakeholders in the organization. It is the daily users who will make the most practical comments.
After developing the target form, it is necessary to properly implement procedures – training, proper access to materials, securing support in possible doubts.
Such activities may involve as limited resources of time and work as possible. However, for this to happen, this process should be carried out by someone experienced. As in any business, competence and experience build productivity.
It should be remembered that procedures must be monitored and updated – in terms of changes in the law or the activity of the unit itself.
It is worth remembering that the key aspect is to act. But act wisely so that the processes and procedures in place fit like tailor-made clothing. Such an effect can be ensured by engaging someone with the appropriate knowledge and experience to support it.
