Outsourcing Statutory Compliance A Better Option for Enterprises
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Introduction
The last thing a growing business needs is to be bogged down by regulatory breaches or legal hassles and this is where the absolute necessity of ‘statutory compliance’ comes in. Statutory Compliance in the broader sense has to do with how a company is legally obligated to protect the health, safety, and welfare of its people. India has its own set of rules and regulations that organizations ought to follow and complying with these statutes is how a country can ensure that its corporations act responsibly and fairly. The regulatory framework landscape in our country is constantly evolving and organizations invest a lot of money and effort to stay abreast of all the changes happening.
1. Streamlining your business processes
As businesses expand, the issues they deal with get more complex, responsibilities get expanded and so does the evident importance of statutory compliance. Statutory compliance could constitute even the simplest of day-to-day tasks such as maintaining the registers and documents prescribed to the more complex year-end report filings. It can cover employee matters about hiring, firing, discrimination, harassment, safety, wages, payroll, benefits, and more. To put it simply, business processes end up being streamlined when statutory compliance is adhered to. As for the key organizational tasks that statutory compliance entails; these can include licensing and registration, maintenance and upkeep of requisite registers, calculation of liability and payment thereof, preparation and submission of periodical statutory reports, and attendance of periodical statutory inspections held by government officials whenever the need arises.
2. Safeguarding the interests of your business and your people
Irrespective of the type of the organization, be it private, LLP, or partnership-based, it is essential to execute statutory compliance. Doing so will ensure that the interests of both the employee and employer are safeguarded in every circumstance. India offers several employee benefits acts such as industrial relations, minimum wages, social security, women and child employment, and health and safety. Apart from these, some acts benefit the organization like provident fund, trade union, ESI, professional tax, and so on. Being a statutory-compliant company means that each of these acts and laws are adhered to and acted upon. Nonconformance to the same will lead to drastic legal consequences. The Statutory Audit is when an inspection mandated by law happens to check on these regulations. Such audits see to it that the books of accounts presented by organizations are true as per the finalized statutory audit checklist. With statutory compliance, companies can avoid certain untoward ‘deer caught in the headlights’ situations that place their reputation and credibility at stake.
3. Staying ahead of your competition
Apart from being on the right and the good side of the law, statutory compliance more importantly also translates to businesses having a competitive edge. Statutory compliance enables companies to steer clear of legal implications or expensive penalties, disqualifications, or confiscation of a license. Complying with the requisite regulations will also mean increased efficiency from all the time, effort, and resources being saved in not having to tackle winding legalities. An offshoot of statutory compliance is no doubt better public relations, better stability, better work ethics, and employees with higher morale and loyalty when compared to those in a company with statutory non-compliance.
4. Thriving in the face of adversity
The COVID-19 pandemic has put to test the business continuity plans of every company across the globe. Statutory compliance is crucial to better prepare companies to face adverse situations such as this. Businesses owe it to their clients and employees to carry on with operations, while meeting service expectations and fulfilling contractual and regulatory obligations. The importance of statutory compliance is in proactively preparing organizations without letting the crisis disrupt the business significantly.
In the wake of adversities like data breaches, cyber-attacks, or weather-related occurrences, there is a certain level of readiness that business continuity plans need to have and statutory compliance can help achieve this. Following regulations can help protect the safety and health of associates and subcontractors, can protect the integrity, confidentiality, and availability of data, can plan for disruptions, can help identify recovery of technical environments, can mitigate the negative effects of disruptions on the customers and business operations and reduce the risk to customers, business operations, and technology. Statutory compliance ensures that resiliency strategies, recovery objectives, risk management considerations, and standards for escalation and communication to ensure transparency and trust within the organization are in place to manage a crisis effectively.
5. Improved collaboration across business functions
When it comes to adhering to statutory compliance, establishing effective policies and procedures calls for the right amount of collaboration, the right forms of distributive mediums, and the right methods to measure the understanding of the policies. It is pivotal to ensure that the company as a whole is on the same page when it comes to matters of statutory compliance. But certain prerequisites need to be met for this like providing unrestricted access to local and regional expertise, looking to get expert external support during audits and inspections when deemed necessary, following ethical practices, being aware of the timelines for adherence to the many laws and regulations and making sure that the updated documents and data is made readily available in a centralized location.
The timely and effective compliance could be ensured by meeting with divisional leaders to understand if the policies and procedures being created are feasible for individual departments, by zeroing in on the best format of policies for the different audiences within the company, by seeing to it that the policies and procedures are easily accessible to all the employees, by setting deadlines for each policy and procedure to be acknowledged and most importantly by finding the best way to measure the employees’ understanding of the policies and procedures. Statutory compliance could also guarantee a smooth and hassle-free onboarding and exit of employees, vendors, and customers for the business.
6. Acing the finer nuances of Statutory Compliance
For every business to successfully operate in India, compliance with all legal and statutory norms is indeed a crucial factor. It can be quite a challenging feat to stay current with the latest developments in the legal framework. Companies can choose from the options of having in place a statutory-compliant software that takes care of all the nitty-gritty of statutory compliance or outsourcing statutory compliance services. By choosing to outsource, the company will have at its disposal expert consulting services that come armed with the personnel and resources for speedy, precise, and error-free handling of statutory compliance processes. The laws about employees and employers are constantly evolving in India. Especially when it comes to statutory compliance in small and mid-sized companies, taking the help of external expert services will seem to be a more viable & sensible option.
