We recently had an experience with a client that got me thinking about what businesses actually mean when they say they want to be compliant.
We were engaged to bring their accounting processes up to best practice. Nothing particularly unusual – correct accruals, proper substantiation of expenses, better supporting documentation, cleaner processes and making sure the accounts actually reflected what was happening in the business.
We went through the work, made the changes and put the processes in place.
But over time, things started to creep back.
Providing all the supporting documents became a hassle. Some of the processes were seen as unnecessary. Questions around transactions became frustrating. Things that had previously just been processed now needed to be explained or substantiated.
Eventually, the business decided to go back to the way things had been done before.
And it raised an interesting point.
Everyone wants compliance until compliance becomes inconvenient.
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It’s easy to say you want your accounts cleaned up and your business operating at best practice. But proper compliance sometimes means more work, not less.
It means keeping records.
It means substantiating expenses.
It means recognising things in the correct period.
It means answering questions from your accountant or bookkeeper.
And sometimes it means being told that something you’ve been doing for years probably shouldn’t continue to be done that way.
As accountants and bookkeepers, we can put the systems in place. We can identify problems, improve processes and explain the risks. But at some point the business has to decide whether it actually wants to follow those processes.
There’s nothing wrong with questioning whether a process is necessary. In fact, you should. Compliance shouldn’t mean creating paperwork for the sake of paperwork. But there’s a difference between removing unnecessary administration and removing controls simply because they’re inconvenient.
That experience reminded me of something fairly simple:
We can advise and educate clients along the path of best practice, but it is up to the client to want to be compliant.
If a business wants best-practice accounting, bookkeeping or payroll, it needs to be prepared for what comes with it.
Sometimes that means a little more work.
Sometimes it means changing habits.
And sometimes it means your accountant asking a question you’d rather they didn’t ask.
That’s part of the job.
Maybe compliance isn’t for everyone.
Or perhaps more accurately, everyone wants compliance – just not everyone wants what comes with it.
The risk becomes, when the numbers are scrutinised, do you have the appropriate documents to pass the pub test?
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We provide expert bookkeeping, payroll, and financial consulting services to help businesses streamline operations and stay financially healthy. With a focus on accuracy, efficiency, and compliance, we tailor solutions to meet your business needs. Let us handle the numbers so you can focus on growth.
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