Compliance is all about a formal legal framework that can assist and develop an organization -wide understanding of the legal boundaries in which the organization operates. Compliances ensure that Companies are viable in the long run in terms of liquidity and profitability. Implementing a Compliance Management System will not only make your business bullet-proof, but it will help the Company stay healthy. It will help you build a supply chain that is stable and resilient because you will be able to identify suppliers you can rely on. In India, Regulations, therefore, needs to be seen as facilitators of prudent business – rather than as restrictions on business growth.
Does a Small and Medium Enterprise (SME) need compliance:
MSMEs suffer a lot due to non-compliance. Most of the time they are not aware of the compliances applicable to them. This is the reason they should have a third-party Compliance Management System. Depending upon the size, an organization can have over 10,000 applicable compliances or may have a few applicable compliances. That is why compliance management software is the best way to maintain the compliance check of an organization. Today, a number of small to medium businesses & enterprises have moved to a completely software based compliance management system, echoing the incredible efficiency & robustness of such software. With the click of a mouse, the enterprise will be able to generate and provide reports of regulatory compliance to regulators, auditors or legal team.
Classification of Compliances:-
Ordinarily, a company operating in the Indian regulatory environment needs to comply with Central, State, and Local legislations. However, in a Software based Compliance Management System, all the documents relevant to all compliances across the enterprise can be found at one place and everything is backed up safely on a server maintained by the compliance management software provider. The compliances which are required to be executed under these Acts can be broadly divided into the following category: –
- Due Date Based Compliances: Every business entity has to follow and report various statutory compliances i.e. monthly, quarterly, half-yearly, annually e.g. Income tax return, TDS return, etc.
- Ongoing Compliances: Every Act prescribes a certain set of mandatory compliances which are to be ensured by a Corporate at any and every given point of time e.g. maintenance of books of account, display of abstracts of HR rules and regulations etc.
- Event Based Compliances: These are compliances which gets triggered at the time of occurrence of an event e.g. shifting of registered office of the Company, change in name etc.
Compliance Management Software:-
A CMS is an integrated system comprised of written documents, functions, processes, controls, and tools that help an organization comply with legal requirements and minimize harm to consumers due to violations of law.
The Compliance Management System software solution offers the following functionalities:
- A total compliance registry where all regulations, citations, permits, and policies are stored and managed.
- A complete list of regulatory requirements and interpretations
- Centralize all tasks required to be compliant with regulations or permits
- Automatic access to regulatory content from industry-leading providers
- Access and sharing of regulatory texts throughout the Company
- Applicability Matrix to understand which regulations and obligations each facility is subject to
- Reports on owners with responsibility for each regulation, permit or policy
- Determine the person responsible for any individual regulation, permit or policy
- Monitoring of non-compliance and automatic triggers for potential non-compliance
- Global Report on all facilities with open non-compliances
- Follow-up on actions designed to address non-compliances
- Corrective and Preventive Actions
- Streamline compliance efforts by identifying new or updated regulatory obligations
- Receive automatic alerts concerning permit renewal deadlines
- Update future tasks related to regulatory changes
A well-designed and well-implemented CMS minimizes the time, money, and hassle you spend on compliance. You will also learn how the information gathered from your CMS influences a wide range of pivotal decisions for your business moving forward.
Undoubtedly, software based compliance management solutions are robust & efficient as compared to conventional practices of manual compliance tracking