Navigate Regulatory Compliance by Tapping into the Expertise of a Real Bookkeeper 

Running a financially compliant business poses greater challenges than ever in the face of a constantly evolving regulatory environment. With frequent shifts in regulations and the emergence of new industry guidelines, staying up-to-date on the latest laws and regulations can become an overwhelming task for small and medium businesses (SMBs).

By partnering with an experienced accounting bookkeeping service, SMBs can leverage the expertise of a live accounting specialist, ensuring adherence and avoiding penalties while focusing on their core operations.

The Evolving Landscape of Regulatory Compliance

Financial and accounting regulations change every year, if not more frequently. New state and federal laws emerge while existing rules are updated or repealed. Some recent major changes include:

  • ASC 606 has introduced new revenue recognition standards, requiring more detailed disclosures and shifting how revenue is recorded.
  • After South Dakota v. Wayfair, multiple states have passed economic nexus laws for sales tax, imposing tax obligations on out-of-state online sellers.
  • The California Consumer Privacy Act (CCPA) has established strict requirements for collecting and handling consumer data.
  • The IRS regularly updates Form W-4, which determines income tax withholding calculations for employees.
  • The SEC has mandated clearer and more transparent executive compensation disclosures for public companies.

Besides these new main regulations, amendments to existing frameworks like GAAP or SOX add further complexity. For example, FASB has recently updated rules on goodwill impairment testing, while the New York Department of Financial Services (NYDFS) has also enacted cybersecurity requirements for financial services firms.

Keeping track of regulations and maintaining accurate records can be a continuous challenge for companies. It’s essential to consult with knowledgeable professionals about state and federal laws to ensure your business complies.

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The Importance of Expertise in Regulatory Compliance

Given today’s complex and shifting regulatory environment, relying on non-experts to manage compliance is risky. It demands a strong grasp of financial reporting standards and an understanding of new legislation.

Seasoned bookkeeping professionals who have dealt with changing regulations over the years develop strong instincts for common oversight areas.

They can review your books, audit your existing practices, identify potential compliance gaps, and provide tailored recommendations to reduce risks. They can also help ensure your firm has access to the tools and technologies needed to implement the requirements of any new laws.

Violations can result in substantial fines and penalties, occasionally reaching millions of dollars. For instance, in 2020, Goldman Sachs incurred a $154 million penalty for breaching risk management regulations.

Apart from the financial repercussions, non-compliant businesses also face enduring damage to their reputation and reduced consumer trust. Specialized compliance expertise can help avoid these consequences.

Real Bookkeepers vs. Automated Solutions

While automated systems and AI-driven software can be efficient, they don’t replace human expertise for compliance management.

Although automation can efficiently execute repetitive tasks or identify trends and patterns, it can’t replicate the complex analytical capabilities of a seasoned professional.

Another downside of relying on automated systems for compliance is the need for customized recommendations. Not all automated programs and algorithms can offer insights adapted to your specific industry or sector, and even AI-powered tools can offer inaccurate advice.

Real-life experts can use their industry expertise and knowledge to offer customized and valuable advice. They understand the nuances of the latest regulations, ensuring your organization follows the letter of the laws and aligns with its underlying intent and overall goals.

This can be especially critical for laws imposing stricter security or data privacy standards, helping you implement practices that cultivate a stronger data safety culture.

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The Role of a Real Bookkeeper in Ensuring Compliance

An experienced bookkeeper is invaluable in managing day-to-day compliance and ensuring adherence to the latest regulations. Their responsibilities typically include:

  • Tracking regulatory changes across jurisdictions and updating internal policies accordingly
  • Assessing new rules and guidelines to determine applicability based on the company’s offerings and operations
  • Modifying accounting practices and bookkeeping workflows to incorporate compliance requirements
  • Overseeing fiscal reporting processes in adherence to disclosure norms
  • Identifying high-risk areas and implementing preventative controls proactively
  • Conducting periodic audits and compliance checklists to identify potential gaps
  • Documenting compliance activities and protocols
  • Educating staff on policy changes to facilitate company-wide adherence

Whether your organization has its own staff to ensure regulatory compliance or not, finding the right professional is essential.

They can assist you in evaluating your accounting standards and record-keeping procedures, providing valuable insights and recommendations to bring them in line with the most current regulations.

Finding the Right Bookkeeper for Your Business

An experienced accountant with a strategic outlook can provide your company with more than just basic transaction recording. Other benefits of engaging a skilled accountant for compliance management include:

  • Relevant experience in your industry and specific compliance needs
  • Familiarity with the latest guidelines and reporting standards
  • Established workflows using current accounting software/systems
  • Audit experience to identify risks proactively
  • Communication skills to disseminate compliance protocols
  • Ability to translate complex regulations into actionable procedures
  • Problem-solving mindset with forensic accounting abilities
  • Ability to customize recommendations based on company-specific needs

Keeping accurate records is crucial, but more is needed. You must also entrust your records to a professional who knows your industry well to help manage risks effectively.

Partner With a Professional for Successful Compliance

With the rising demands of regulatory compliance and the growing complexity of regulations, it’s more important than ever to rely on a professional who understands the compliance landscape.

Partnering with a qualified bookkeeping service can assist in establishing long-term adherence to regulatory best practices.

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