How to transform your compliance process from data input to data management
Managing regulatory filings is an essential task within an entity compliance workflow. Organizations typically need local or industry-specific business licenses (or both) to operate legally.
Failing to stay on top of this process—which involves researching, submitting and renewing business licenses in a timely fashion—may result in troublesome consequences. These include financial penalties, suspension of the ability to contract work within a jurisdiction, business closure—and even civil or criminal charges for employees.
In order to avoid such outcomes, it’s important to understand both the challenges of business license compliance and the steps you can take to design a smart management process.
Business license data management challenges
The regulatory landscape surrounding compliance has grown ever more complex in recent years. Governments at the state and local level have increased compliance requirements and fees, while simultaneously scaling up enforcement efforts.
Given that there are roughly 75,000 separate jurisdictions at the local, state and federal level—and thousands of license types—organizations must be especially diligent about staying compliant.
This means being able to determine the license types you will need, the proper licensing authority, how to contact them, and their licensing requirements.
However, this information is often difficult to source and changes regularly. It’s estimated that 65 percent of license, tax and registration requirements change on an annual basis.
You also should be current on all entity changes, as certain triggering events could necessitate new licenses and or updates to existing licenses.
This includes monitoring name changes, ownership or management changes, corporate address changes, business expansion, the opening or closing of offices or the introduction of new products and services.
Finally, remember that each licensing authority may have specific rules governing the timing and recurrence of business license filing requirements. This means that requirements often vary considerably depending on both business license type and the authority issuing the license. It is critical to identify adverse compliance events in your license portfolio to quickly avoid compounding penalties and disruption to your business.
