Are You Operating Legally? 5 of the Most Common Compliance Mistakes
It’s always best to prevent a problem before it becomes a problem, yet many businesses do just the opposite. Waiting until your company faces a regulatory audit before actually taking the time to analyze and improve your compliance policies and procedures is problematic.
Compliance is something that applies to all businesses, no matter their size, industry, or niche. While all companies have some sort of compliance strategy mapped out, not many know how to integrate those processes and strategies to ensure profitability and operational efficiency.
Though compliance planning requires a lot of time and energy, if ignored, compliance mistakes can cost millions of dollars. Despite their best efforts, companies frequently make the same mistakes when it comes to a thorough and effective compliance strategy.
Keep reading to learn the 5 most common compliance mistakes and how you can avoid them.
1. Not Conducting Internal Compliance Audits
It’s always best to prevent a problem before it becomes a problem, yet many businesses do just the opposite. Waiting until your company faces a regulatory audit before actually taking the time to analyze and improve your compliance policies and procedures is problematic. Once your company is audited, you’re on a time crunch and you’re likely to find all sorts of issues.
Instead of waiting until you’re forced to audit your compliance program, it’s best to have a process in place in which your business periodically reviews everything related to compliance. Not only can you pinpoint and resolve issues before they become even larger problems, you can be properly prepared for when a regulator conducts an audit.
With a thorough internal compliance audit process, you can have the assurance that your company will face minima,l if any issues during a true compliance audit.
2. Not Completely Understanding Industry Guidelines
Compliance rules and regulations tend to be lengthy and verbose. More often than not, organizations and their stakeholders don’t fully understand the guidelines that they need to be compliant with. Business owners and partners who make critical business decisions can easily overlook details set forth by a guideline. This leaves all sorts of room for error and non-compliance.
HIPAA is a great example of a compliance regulation that has a wide range of rules and standards that not many businesses fully know the ins and outs of. Did you know that HIPAA requires training? Did you know that the regulation also requires companies to report violations? These minute details can have serious consequences on your business’ compliance standing.
3. Using Legacy Technology
Compliance programs, like any other technology, need to be updated on a routine basis. But, many companies fall into the bad habit of never upgrading these systems because of technical and financial constraints. In many businesses, compliance suffers because of a lack of modern technology.
Companies that have small staffs or small budgets tend to use fragmented systems and programs which greatly impacts data availability. When data is sourced from several different systems, it’s much harder to create accurate reports and metrics, let alone do so without frustration.
To avoid this common compliance pitfall, avoid using outdated technology. Instead, consider a cloud-based compliance solution that streamlines data, reduces redundancies, and minimizes cost. With a modern compliance solution, it's much easier to access and analyze data.
4. Not Properly Vetting Vendors
Another mistake that companies make in regards to compliance is not properly vetting vendors. While your company may be doing everything right in regards to being compliant with local, state, and federal regulations, this doesn’t mean that the service providers or third-party vendors you’re working with are achieving the same high standard.
By not properly vetting third-party vendors, your company may be liable in the event of a compliance violation. Even though vendors are entirely separate from your company, if a violation is committed on behalf of your company, you can face liability.
Before contracting out to any third-party vendor or business partner, do your due diligence to ensure that the company is compliant and meets all of the necessary regulations.
5. Neglecting Physical Security
Data breaches are a growing concern in today's world. Between January 1 and March 31 this year, around 686 breaches were reported and almost 1.4 billion records were exposed. While companies have set forth to bolster their online security, many have allowed physical security to take the back seat.
Because companies are less focused on physical security, buildings and office spaces needed to be properly secured just as much as virtual environments. Because of this, companies overlook basic but necessary security elements such as physical access and proper document storage.
By avoiding these 5 common compliance mistakes, you can ensure that your company is operating legally. Meeting compliance regulations is a must, especially if you want to avoid costly fines and potential legal issues.