Top 5 Compliance Management Challenges for small businesses

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A typical Indian private limited company employing more than 20 employees has to track and complete 112*  compliances in a year ( See Annexure)

For the business owner or compliance officer, compliance management is very critical function as any delay or non-compliances results in interest, penalties, additional fees, disallowance of expenses  and risk of prosecution. 

Frequent changes in filing procedure, change in law, changes in due dates etc make it difficult for a business to manage all compliances internally. Hence several compliances are outsourced to CAs , labour law consultants etc. CAs are also coping with increased volume and frequency of compliance work and need to be chased to complete work in time

Organisation Goal

Ultimately any organization strives to achieve the following goals in respect of compliances:

  1. Each compliance is completed accurately and on time
  2. Do not wait for the last day to complete compliance
  3. Zero interest , late fee or penalty due to non-compliance or delayed compliance

Top 5 Challenges

  1. If there are multiple units / branches, then tracking applicable compliances for each such unit.
  2. Tracking on-time completion of each compliance being done in-house
  3. Ensuring accuracy of compliance 
  4. Tracking and chasing completion of compliances outsourced to external firms 
  5. Storing compliance completion proofs so that these can be retrieved in future for audit or in response to legal notices

Solution : Automating Compliance Management

Managing compliances manually with the help of spreadsheet , calendar etc can be very stressful and time consuming. Yet, it may not result in effective control.

Technology can play a very important role in bringing efficiency and control in this area. Today several cloud solutions like Proactly are available, which make the task of compliance management very easy. The illustrative list is given below.

  • Real time dashboard giving details of upcoming, overdue tasks. 
  • Each team member has access to the cloud software to view pending compliances and complete them
  • Compliance proofs can be uploaded against each compliance. Searching proof later is possible within minutes
  • Each day team member gets reminder mails giving details of upcoming compliance
  • Manager gets escalation email for work not done 
  • Data analytics to improve compliance levels
  • Easier audits as complete library of all compliances with proofs is available at a glance

Hence automation is much more efficient way of managing compliances and SMBs should move away from spreadsheets and embrace automation to cope with the demands of regulatory compliances

Annexure 

*Actual number may vary.

RegulatorComplianceFrequencyCount
GSTGSTR-3BMonthly12
GSTGSTR-1Monthly12
GSTGSTR-9Yearly1
Income TaxTax ReturnYearly1
Income TaxTDS-Form-16AQuarterly4
Income TaxTDS-Form16Yearly1
Income TaxTDS Return – 26QQuarterly4
Income TaxTDS Return – 24QQuarterly4
Income TaxTDS Deposit- Non SalariesMonthly12
Income TaxTDS Deposit- SalariesMonthly12
Income TaxAdvance TaxYearly4
MCAActive 22A MCA 21Yearly1
MCAMGT-7Yearly1
MCAAOC-4Yearly1
MCAAnnual General MeetingYearly1
MCABoard MeetingsQuarterly4
ESICESIC-DepositMonthly12
PFPF DepositMonthly12
PTAXPTAX CompanyYearly1
PTAXPTAX-Employee-MonthlyMonthly12
Total112
Compliances during 2019-20 for a private limited company