What is compliance reporting?

Compliance reporting is a practice that organizations use to display that they are adhering to a set of industry rules, regulations, laws, standards, and guidelines that are required by the local, state, and federal governments.

Compliance reporting might be used at a company to detail progress in regard to a specific compliance initiative or to give a broad overview of a company's compliance efforts. In some instances, compliance reports might be required, while in others, they might be voluntary and used as internal oversight tools.

The areas of focus for compliance reporting vary, depending on the particular company. Regulatory compliance standards and laws are often provided by the federal government or branches of the federal government, like the Occupational Safety and Health Administration (OSHA), or the Equal Opportunity Commission (EEOC). These are just two prime examples.

There are often many different governmental contributors to the regulations of an industry. The specific requirements of regulatory compliance can vary depending on these factors:

• The industry the business operates in

• The type of business an organization is involved in

• The size of the business

• The specific operations and activities that the business is engaged in

When companies use compliance reporting they can experience a number of different benefits, including:

• Establishes customer trust

When a company's target consumer base knows it complies with laws, regulations, and quality standards they are much more likely to trust the organization. This results in them being far more likely to purchase its products and/or services, and also to recommend its business to other consumers.

• Increases profits

Other businesses are also encouraged to purchase products and/or services from an organization when it stays in compliance. This can lead to a massive increase in terms of business revenue, and business-to-business (B2B) profits can provide a substantial and stable income stream for a company.

• Compliance legally protects an organization

A company can avoid extremely costly lawsuits by staying in compliance with laws and regulations. When consumer bases find out a company has been negligent in terms of staying in compliance, it can sometimes result in mass lawsuits from consumers. Complying with federal and any other necessary laws and regulations prevents legal actions from any source.

• Helps a company avoid penalties and fines

Another bad outcome of not staying in compliance is the possibility of occurring penalties and fines against a company. When a federal or local agency finds out that a company is not staying in compliance, they can, and often do, impose penalties and fines against that company. Complying with laws and regulations helps businesses avoid this.