Compliance Costs Suck — but They Make Your Business Grow

Gema Library | Tax & Financial

Author: Indah Hanika

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Few things strike fear into a business owner like hearing the word “compliance.” At best, it’s seen as a necessary evil — something that needs to exist to prevent companies from engaging in immoral or illegal behavior. And at worst? It’s an annoying, scary, and stressful process that could result in penalties for you.

But just because compliance isn’t a pleasant experience, it doesn’t mean that it can’t benefit you. Yes, that’s right — it can actually be a good thing. Here’s why.

Become more efficient

What if part of the reason you find compliance so annoying and difficult is that it forces you to do unpleasant but necessary things that will make your business operations better? It might sound unbelievable, but that’s exactly what numerous studies have found. For instance, companies that consider risk when formulating their strategies are more likely to achieve a profit margin of 10% or more. Similarly, research by PwC revealed that businesses using compliance software had higher returns than an average company from the S&P 500 — a CAGR of 28% compared to a CAGR of just 13%, to be precise. Convinced yet?

Finetune your processes

Now we’ve piqued your interest in compliance, it’s time to look at exactly what you should be paying attention to.

Here a few key processes for all companies to consider:

Record-keeping — always keep and categorize information about your business processes to ensure auditors and regulators can’t catch you out.
Data and privacy — now more than ever, businesses need to be proactive about keeping information about their processes and employees safe.
Supply chains — you need to make sure third parties and partners are following the right procedures too.

Improve your reputation

Which company would you be most likely to trust: one that is lax about its compliance practices, or one that always goes above and beyond to ensure it’s mitigating risks? Share on X

Almost anyone would choose the second option. This is especially important for B2B firms — other businesses understand the risks of doing business perfectly, and are more likely to see your nonchalance as a red flag.

However, even consumers who lack compliance knowledge may be interested in its link with ethics and corporate responsibility. Managing risks and your supply chain shows that you’re making an effort to look after your staff and the environment, which is something many customers value.

Then there are your stakeholders to consider — again, a solid compliance process demonstrates a commitment to doing things properly and safely. The same applies to prospective employees.

Come on, compliance!

You might be thinking, “but couldn’t I do all this without having to go through compliance?” The honest answer? Maybe — but that’s not an option, so let that thought disappear from your mind.

At Gema Consult, we don’t want to see you caught out. We help businesses manage their bookkeeping and compliance processes to ensure they always comply with the relevant regulations. Why not contact us to find out more?

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Author

Indah Hanika

Accounting Manager

Former Inland Tax Revenue Authority, Bringing a Fresh Creative Approach to Finance
The department of finance can often be very cut and dry. Indah Hanika, however, brings a fresh approach to this, which comes from her passion for helping to grow businesses and an understanding of its creative side, which allows her to communicate across departments and create spectacular financial systems.

Providing a logical approach to day-to-day business is how Indah keeps Gema functioning as smoothly as it does. Understanding the more creative aspects of the consulting firm is what makes her so effective as a collaborator—being able to pass on that expertise to her clients? That is what makes her someone you truly want on your side.