Ten Things You Should Know about Compliance

All businesses have to comply with government regulations to stay in business. Otherwise, they can land in endless trouble with law-enforcement authorities. This can distract them from the business and even lead to forcible closures. Many of these regulations, like the Sarbanes Oxley Act of the U.S., require maintenance of business records in specified formats and/or specified periods. Systematic attention to compliance issues can save substantial costs.

1. In the U.S., Sarbanes Oxley Act and Health Insurance Portability and Accountability Act (HIPAA) have changed the scenario regarding maintenance of documents. While the former has dramatically increased the volume of documents that need to be maintained, the latter has made confidentially a major requirement.

2. Compliance requires both training and money. If your business doesn’t have trained employees who can attend to compliance issues, it can lead to high costs with unsatisfactory results. Organizations like Independence Blue Cross provide formal compliance training.

3. Compliance can involve complex requirements. The Sarbanes Oxley Act (SOX) makes it obligatory for top management to ensure that financial records are accurate. HIPAA makes it obligatory to protect the confidentiality of personally identifiable data that comes into the possession of businesses. The government website maintained by SBA of USA helps small businesses find out their compliance requirements.

4. Organizations like Information Systems Audit and Control Association focuses on developing best practices to use Information Technology for compliance and audit. Such best practices can help reduce costs and improve results.

5. In addition to meeting the direct statutory requirement of maintaining certain records for specified periods, document maintenance also helps prove that the organization has complied with regulations in certain matters. Incidents and actions are documented in sufficient detail to show that all requirements have been met.

6. Documents often have to be maintained in specified formats. Stockbrokers have to maintain electronic records in a non-rewritable and non-erasable format to meet SEC requirements, for example. Successful compliance will be possible only if you are aware of all such requirements.

7. Electronic Document Management Systems can provide invaluable help in ensuring compliance. They can ensure maintenance of records in standard formats required by regulations. They can expedite electronic discovery of all relevant documents in a timely manner.

8. Document management systems can also create audit trails automatically. Such audit trails can prove invaluable in proving the authenticity of electronic documents, which are easy to change and delete.

9. Audit trails typically record who accessed which document and when, and what the person did with the document. The trails are generated by the system and are not alterable by the users, who might not even be aware that such a trail is being recorded.

10. Though troublesome and distracting, compliance is something that businesses cannot neglect. Non-compliance can lead not only to trouble with enforcement authorities but also business damage. The firm’s reputation can take a hit in the market leading to loss of contracts and difficulty to raise money.

Compliance is easier with electronic document management systems (EDMS). Documents can be created in the right format as required by regulations by using templates and checklists. They can be preserved for required periods using retire-by meta-tags. Electronic discovery of particular documents or information is far speedier under an EDMS.