Compliance tracking is an enterprise-wide issue. Remaining compliant is critical to businesses in a range of industries and should be top of mind for departments ranging from human resources and finance to operations and marketing.
Whether your business is finance or food processing, having the proper tools in place to track compliance is essential for operational success and passing compliance audits. While the information that is necessary to track may vary from industry to industry, the fundamental issue remains the same. Companies need software solutions that ensure proper data is being collected and tracked, proper reports are generated, and, if problems exist in adhering to compliance protocols, those issues are flagged and addressed quickly and adequately.
Why compliance tracking matters
Multiple governmental agencies have increasingly specific (and at times frequently changing) requirements for regulatory compliance. In some industries, this means tracking consumer complaints. In others, its maintaining accurate records on employee categorization.
Let’s take a closer look at some common compliance issues that nearly all businesses face related to adherence to state and federal regulations about employees, taxation, and payroll. Here are just a few compliance issues related to payroll that require effective tracking tools.
- Misclassified employees. Companies need to clearly delineate which employees are full- or part-time, and which are contractors, freelancers or temporary employees. Theses classifications dictate benefit eligibility and the amount and type of payroll taxes to be deducted.
- Time records. Organizations are required to keep accurate records of time worked. Management of time records is essential for ensuring that employees are paid both regular wages and, if applicable, overtime. Not recording time can lead to legal issues if an employee claims to be underpaid, or in the case of an IRS audit.
- Multiple locations. When an organization operates in multiple states, compliance regarding state and federal taxes needs to be applicable to the proper location. Different states may require different filing protocols as well. The matters are further complicated when operations occur in multiple countries.
Compliance tracking software helps mitigate the risks associated with managing the requirements for recording and reporting. Let’s take a look at newer requirements needed for credit unions as an example of what industry-specific tracking is needed.
Regulators are now looking at complaints filed against credit unions in order to pinpoint unfair, deceptive, abusive acts or practices (UDAAP), or Fair Lending Act violations. Regulators and examiners can use reporting on complaints as a way to assess compliance with these regulations. Further, with effective reporting, credit unions themselves can identify potential issues and implement remediation procedures.
Training is crucial
In order to assure compliance, organizations need effective compliance training programs that ensure employees understand its importance. Training programs need to ensure that the right employees receive the proper training, and understand what all relevant compliance regulations are and why they are what they are.
In certain industries, such as food production, pharmaceuticals, medical devices and chemicals, compliance is an every-day consideration. But, whether compliance is a front-of-mind issue or an occasional factor, employees need to be prepared to maintain compliance and to take correction action when out of compliance.
At NexTec Group, we work closely with companies in a wide array of industries to understand their compliance issues and develop solutions that meet their needs. Our experienced consultants have a deep base of knowledge about various solutions and how to integrate compliance management software most effectively with existing systems. To learn more about how NexTec Group can help with compliance management and other system integration issues, we encourage you to download our NexTec Corporate Brochure.