Are you prepared for more growth and profitability? Part 2

In Part 1 of this series, we talked about making changes to your processes so that fewer manual entries were being made during the close process. So now let’s tackle the next question. 

Q2 - Have you reviewed your compliance with local jurisdictions lately? 

The Controller of a business is in the best position to lead this mission as they have the most knowledge around your accounting structure and therefore the ability to see and assess the company’s level of risk exposure. As a company grows so does its level of risk. If your company has grown and you haven’t reviewed your level of compliance with the regulatory requirements of your local jurisdictions. It’s time for a review. 

Here are a couple of best practices that can help ensure your compliance is keeping your risk exposure to a minimum.

Create a Risk Framework

  To ensure you are looking at all areas of the business it’s best to assemble of team from across all areas of the business so that you don’t miss out on any regulations. This team will be tasked with identifying all of the areas of potential risk and then developing plans or processes that will either eliminate or minimize your risk potential. As the business continues to grow this review process should take place on a continuing and regular basis to catch any new regulations.

Conduct Risk Reviews

  Now that you have put new processes in place it’s important that they are reviewed on a regular basis to ensure that they are not only being followed and effective but also that they are still relevant. This will also open up the opportunity to manage any new compliance requirements as they come along.

Are you in compliance with all local jurisdiction requirements?

  As your business grows so does the area you serve. This brings new and different compliance requirements to your business. The biggest challenge is usually taxes. This could be sales tax, corporate taxes (franchise) and even payroll taxes can be affected by the requirements of each new jurisdiction. This also means reviewing the potential tax impact of moving into a new area prior to any expansion being made. An international expansion would require an even more thorough review as it would add even more layers of complexity to your business. Before moving to any new area, it’s important to analyze the potential tax impact this would have on your business.

Key Takeaway: Create a central review process to ensure the right controls are in place.

As you can see overlooking your risk of compliance as you grow can have a lasting impact on your business. Identifying potential risk areas before moving into a new area will set you up for success. 

Stay tuned for part three of this series where we will look at what’s holding up your close.