Compliance costs billions of dollars for US companies every year. A clear picture of what compliance involves, how it's accomplished, and how costs can be reduced can save significant amounts to your bottom line. Additionally, it can prevent trouble with enforcement authorities responsible for monitoring compliance. This is particularly true for small businesses.
- Compliance means adhering to a policy, regulation, specification, or standard. Businesses might comply with standards such as those produced by ISO to gain customer confidence and acceptability. However, regulatory compliance is the focus.
- With proliferating regulations like the Sarbanes Oxley Act and the Health Insurance Portability and Accountability Act (HIPAA), compliance has become a major preoccupation for US businesses.
- Primarily, compliance involves understanding regulatory requirements and ensuring that all concerned employees are aware of these requirements and how to comply with them. There are organizations like Independence Blue Cross that provide formal compliance training in specialized industries.
- Compliance typically involves doing specific things in certain ways and maintaining data as evidence that these have been done as required. Maintaining documents is a key component of compliance management.
- Compliance requirements cover a wide range of activities, from monitoring the processes of producing and changing financial records (Sarbanes Oxley Act) and protecting individually identifiable health information (HIPAA) to the process of initiating disciplinary proceedings against employees and locating your business in non-residential areas.
- To help you identify the regulatory requirements that you have to comply with, many government agencies provide single-reference sources of all business regulations. For example, the Small Business Administration has a government website that proprietors of small businesses can visit.
- There are also organizations like Information Systems Audit and Control Association that have developed a set of best practices to use in Information Technology to ensure compliance (along with other requirements such as auditing).
- A major reason for implementing document management systems is the need to maintain data as required by government regulations. Properly maintained compliance data help businesses demonstrate their compliance to enforcement authorities and, where necessary, in a court of law.
- Typically, compliance data have to be maintained in specified formats. For example, stock brokers and members of stock exchanges have to store electronic records on non-rewritable and non-erasable media.
- Electronic Document Management Systems can help ensure that compliance requirements are met by providing facilities such as templates, checklists, triggers, and automated alerts.
- Best practices adopted by document management systems can also create audit trails that can prove invaluable as evidence in a court of law. Electronic documents can be modified and courts will need to see the records of who modified what.
- Non-compliance can cost not only money in the form of penalties but also business damage in the form of loss of supply contracts and public-relations disasters. It can also lead to criminal proceedings against members of top management. For example, the Sarbanes Oxley Act penalizes destruction of e-mails by members of NASD and NYSE with 20 years imprisonment.
Good document management systems come with best practices for document creation, change management, storage, indexing, retrieval, and archiving. These can help businesses comply with regulatory requirements. These systems can also provide tools such as templates that can be tailored to ensure compliance with specific requirements. Concerned managers can create the templates for the employees to adhere to.
