Why to Outsource Compliance Services to a Professional?
Updated: Jul 27, 2022
Every business, ranging from SMEs to Fortune 500 companies, needs to adhere to certain laws and regulations of the land, failing which it shall have to face the dire consequences. The fact is that one loophole in compliance management can cost you your business. So, you have to be very particular about managing your compliances.
This task has become all the more difficult these days for the business people because today’s compliance function demands more experience, skills and knowledge than ever before - primarily with the growing regulatory complexity that compliance teams need to comprehend and navigate. They not only need to know about the laws and regulations but also remain updated on the changes that keep coming up frequently. Consequentially, more and more organisations are looking to outsource different aspects of their compliance workload to experts who offer legal compliance management services.
In this article, we will explore why you should outsource statutory compliance services of your business to the experts, the advantages thereof and whether it is suitable for a start-up so you can make the correct decision for your organisation.
1: Need to Outsource Compliance Services
There are many reasons why organisations should seek outsource compliance solutions. Some of them are as follows:
* Complex Laws
Considering the complexity of the laws, it is difficult for a businessman to keep a tab and have a thorough understanding of all the applicable laws and manage compliances holistically.
* Frequent Amendments
Hundreds of updates come up every year in various laws, such as the Income-tax Act, Goods & Services Act, etc., that must be well interpreted and followed to duly comply with all the provisions.
* High Penalties
You might face huge penalties, imprisonment and the risk of cancellation of your business license if you fail to comply with the applicable laws and provisions.
* Strict Enforcement
The government and regulatory authorities keep heightened scrutiny and vigilance through e-assessments, online show-cause notices, etc., to ensure that all the provisions are well complied with.
2: Benefits of Outsourcing Compliance Services to a Professional
Some of the benefits of outsourcing compliance functions such as GST and TDS Return filings, Accounting, ROC filings, etc. to a professional are as follows:
* Helps in saving a lot of time
Business persons struggle with finding a work-life balance irrespective of how well established their business is. The tasks that are out of the scope of your core business area and bog you down can be taken care of by professionals leaving you with more time to spend with your family. Also, as it’s your outsourcing partner’s responsibility to stay on top of all the latest regulations and rule changes, outsourced compliance service management solutions can help free up your staff to concentrate on important business projects.
* A better understanding of the laws
While this may seem quite obvious, it is imperative to remember that government is quick to revise rules & regulations. It is indeed not easy to keep them all in check. A professional can take that concern away from your hands and ensure that your business stays compliant by timely filing the various returns as may be applicable and meeting all the relevant compliance requirements.
* Prevents legal trouble
Not following the laws and regulations to their exact point can land you in a pool of penalties, fines, notices and business risks. Regardless of how much time you invest in learning about the laws and regulations, it’s difficult to gain expertise in an area that does not come under the purview of your stream and hence, there are high chances of committing errors in one or the other compliance requirements.
On the other hand, the experts have been doing it day in and day out for so long that they’re well aware of the areas where mistakes are possible; therefore, they make conscious efforts to avoid them. Moreover, the compliance management experts follow the updated rules and provisions and save you from all sorts of legal troubles.
* A professional reputation
The right professional will help you represent your company in the best way possible. This is even more crucial for new businesses. A good market value and recognition might help you build a better network with banks and other investors.
Outsourcing services proves to be a great way to ensure that all the compliances are being carried out at the expertise level. By putting the business’s books and the compliance responsibility into the hands of highly skilled professionals who understand the best practice and how to assign staff for specific tasks, the job becomes quite easy and effective.
* Scalability options
The need for Outsourcing accounting and compliance management services in India has become a necessity now a days.It allows the organisations to expand or cut back their operations in no time. Whether you’re looking to grow the business or cut down on spending, having a reliable and well-versed team of experts at your behest will help you achieve your goals easily. Outsourcing provides the flexibility that the in-house bookkeepers and compliance team members cannot offer.
The best professional bookkeeping and compliance service providers have years of experience in this field and have developed processes and procedures for each business type. Then, these procedures are customised to the client-based specific needs. With a robust knowledge of multiple software, one can undoubtedly expect accurate and consistent results from such professionals.
An organisation comprises many business processes, and you, as a business owner, cannot concentrate on all of them. Your business will flourish when you put your entire focus on what you are required to do – managing the organisation. Understanding and executing the legal process is a complicated and, most importantly, time-consuming task. If you take it all on yourself, be certain that there will be other significant processes you will be missing on.
Conversely, a dedicated compliance management team of experts will help you focus on your principal business activities by removing from your shoulders the burden of managing something as serious and risky as legal compliances.
* A permanent solution to disruptions in compliance management
Outsourcing the services of your business also avoids disruptions in compliance management and turnover costs caused by relying on several key personnel who could leave at any time.
3: What if your business is a Start-up?
If your organisation is a start-up and is in the initial stages of its operation or if your business is currently not operating on a large scale, and in case you want to save the cost of outsourcing the compliance services to a professional and think that you can manage its compliances on your own, then instead of going for outsourcing, you should make the arrangements for the fulfilment of all the compliances in-house only. However, even then, it is advisable to consult a professional such as a Chartered Accountant from time to time to keep yourself acquainted with the prevailing laws and compliance provisions and to understand precisely how to proceed with fulfilling the legal requirements.
Nevertheless, if you feel that the compliance function is consuming a lot of your time due to which you are not being able to focus on your core business, then you must reach out to the best professional for compliance management and outsource your entity’s compliance services to such expert.
Whether your organisation is a team of 50 or 500+ employees, the importance of the compliance function can never be undermined. For any firm wanting to become law compliant, outsourcing of compliance function may become the key to success. It might take courage to challenge the traditional in-house approach to compliance, but the benefits of outsourcing the compliance responsibility far outweigh its perceived challenges. You must outsource the job to the right professional to ensure systematic compliance.