The Ultimate Cost of Non-compliances on Your Business

The cost of non-compliance?is?more than twice that of compliance?costs. Although some companies might be tempted to continue running?the way?they always have, rather than changing to meet?new?compliance requirements, this can have significant financial – and reputational – impacts.

Recent research indicates that the failure to comply has become more expensive than ever, far exceeding compliance costs.?

In the past, compliance laws and regulations were strongly recommended, but non-compliance didn't equate to steep fines, legal implications, or business reputation consequences that are now a result of noncompliance. It involves a range of systems and processes to be put in place to ensure high-levels of compliance:

• First is creating a system where the company can?keep track of the various regulations?and make the necessary changes to systems and processes as per the requirements. Different countries have different regulations and you will have to know the applicable rules in the countries you operate in.?
• ?Develop internal policies?that act as the building blocks for meeting regulatory requirements, give its compliance efforts a direction, and establish systems and processes to achieve these goals.
• Document control and management?is a natural extension of compliance requirements since businesses need to maintain their latest documents in an easily accessible manner, update them as and when required, and submit them to regulatory authorities as documentary evidence.
• Inspections, audits, and assessments?are an important way of ensuring a business is on track with compliance and mid-course correction if not.

However, over the years, a well-implemented compliance management system results in benefits such as:

• Improved process efficiency, leading to higher productivity, lower cycle time, lower failures, etc.
• Lower deviations, the consequent rejections, and cost of reworks.
• Increased customer satisfaction leading to improved reputation, market share, and revenues

Zero violations do not equal compliance

While justifying reasons not to implement a robust compliance program, organizations often believe they effectively manage compliance risk simply because they haven't experienced any regulatory violations to date, but to believe that is a grave mistake. No violations do not mean there are no issues — in reality, there may be significant issues that haven't been detected yet.

The majority of companies need help to afford to become complacent about their compliance efforts. While it may be tempting to continue running the way you always have, that can come with significant financial and reputational impacts.

With the cost of noncompliance nearly three times the average cost of complying with industry regulations, there should be no question about the value of having a robust internal compliance program and the right solutions necessary to be effective.