Compliance for any business whether small or medium-sized, calls for that business to fulfill its legal obligations. This is in order to safeguard the wellbeing, safety, and welfare of others, as failure to act in accordance with the laws can result in legal penalties as well as losses for the business.

Examples of compliance in business can include, getting hold of a business license in a town, following employment law and legislation, or something as simple as paying taxes, which may fall under tax and accounting compliance.

Although for small businesses compliance may be easier, but as it grows the issues can become more complicated. The complications can be due to the expansion of responsibilities that might increase with the growth of the business. Responsibilities can include that of managing employees, hiring workers, workplace safety including slips, trips and falls, payroll etc. Taken into consideration the process of making and selling of a product and service regardless of whether it is a small or medium-sized business, for example, a restaurant that should meet the guidelines of the health department. Compliance is important for both small and medium business because:

  • It can prevent criminal charges

Criminal charges can be faced by a business if it does not hold fast to the laws. There exist a number of regulations that apply to different areas. Some of these include the management of staff, handling of stock, advertisement of products, workplace safety etc.

  • It can prevent health and safety risks

A workplace where employees are prone to injuries, accidents, or health related issues is considered to be a compliance risk. Compliance risks not only occur because of failure to adhere with the laws and regulations, but can also occur because of management failure.

  • It can prevent environmental risk

Activities a business is involved in can result in damage to the environment as well as the living organisms. This includes improper dumping of waste, release of chemicals in the air or water, and other similar things.

  • It can improve efficiency

Efficiency in a business can lead to improved returns. This can be achieved with compliance whether it is in regard to small businesses or medium-sized ones. If employees feel that they are well compensated for the effort they are putting in then they will be eager to work. Poor working conditions might have a negative impact on the employees as well as on the products and services.

  • It can help build a positive reputation

The public image can have a drastic impact on the success of the business. An organization faced with court cases or criminal charges can lead to the loss of trust from the public. This can further affect the sales of the organization’s products and/or services.

At the same time, a positive image can add to the reputation of the business and in turn build up the trust of the customers. This is because consumers are more likely to go with companies that have a trustworthy image and reputation.