The Cost of Compliance

Have you ever heard of a potential customer being “wowed” by a company’s policies and procedures ?

NO of course not!

Customers are impressed by slick technology, impressive office space and well spoken business development directors.

Few small businesses ever want to spend their precious working capital on something as uniquely unglamorous as accounting and contracting policies and procedures.

So why bother investing the time and resources in developing them?

Because if your customer is the federal government, you not only have to “wow” them with your products and services but also with your adherence to the compliance requirements mandated in the FAR and other oversight regulations.
A message that we drive home with our clients and potential clients, is that the cost of compliance is significantly cheaper if compliance is addressed early in the company’s life cycle.

It is far (no pun intended of course) less expensive to develop and implement compliant policies and procedures while the company is young and has not become entrenched in business procedures that are not compliant and that have to be re-tooled completely.

This harkens back to the cost of quality adage that you can a spend a dollar today doing things right or a hundred dollars down the road to rework was what implemented poorly the first time.

Administrative “details” are the last thing that entrepreneurs want to focus on when building their products and delivering their services. This goes for everything from setting up well thought out accounting systems to implementing timekeeping systems or subcontracting policies.

Certainly the compliance requirements become increasingly more stringent the larger your contracts in value or diverse in contract vehicle, but assuming the goal of every young company is to grow, then the complexity and requirements will naturally follow.

If you understand the basics of compliance and have an idea of what the progression of requirements will be then you can manage the cost of implementation over time –

Spend the dollar today to prevent the necessity of spending the hundred when you realize after a visit from DCAA that you are out of compliance and that it will be a major fire drill to get your house in order or risk losing your contracts.

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Terry Weaver

I agree completely – it is policy compliance that protects the government’s Number 1 stakeholder – the Citizen/Taxpayer/Recipient (fill in your key customer title here). If the Federal government ignores security, privacy, accessibility (section 508), then the one who suffers is the person who is dependent on the services we provide. Building policy compliant products and services makes business sense – it just costs too much to remediate bad design.

Jaime Gracia

I too agree that small businesses have to understand that compliance is not optional. Many businesses forsake infrastructure investments for growth and business development, but it is a foolish strategy as the growth will lead to much more expensive and complicated governance requirements when the growth occurs.