Rule changes happen all of the time. Whether in accountancy, people policy, tax laws, recruitment, the list goes on. These rule changes can really appear quickly and catch you off guard if you aren’t keeping tabs on things. If they do catch you off guard you could end up continuing to operate in the wrong way. For example, if HR rules change you’ll end up not following the right rules when dismissing someone or, if the rules are accountancy based you could be drawing up your accountancy filings wrong. Here are some sectors where the rules change often, and as a result, they could hurt your business.
Changes In Accounting Laws: Lease Accounting Example
Accounting changes happen quite often but when they occur in an area that effects the majority of businesses they can be confusing. For example, the majority of businesses in the USA use some form of a lease. This could be for a premises from where they do business or for heavy manufacturing machinery. Recently, the rules around lease accounting changed with the introduction of ASC 842. Otherwise known as FASB topic 842 the update is aimed at creating more transparency on the balance sheet. Now, pretty much all leases have to be recorded there. Before FASB topic 842, a lot of leases weren’t put on the balance sheet. This is an example of a rule change that could have easily caught people out if they didn’t have the right lease accounting software or industry knowledge.
Changes in Labor Laws
Labor laws can affect a business’s workforce, working conditions, and pay. Changes in labor laws can lead to increased costs, reduced productivity, and a shift in the balance of power between employers and employees. If you miss any state or national labor law changes you could be opening yourself to lawsuits or falling into trouble with the local government. Make sure you know what the current laws are when looking at employment contracts, especially when losing or recruiting staff.
Changes in Environmental Regulations
Environmental regulations are designed to protect the environment, but they can also have a significant impact on businesses. Changes in environmental regulations can lead to increased compliance costs, stricter environmental standards, and reduced access to natural resources. If natural disasters have recently occurred in your area then be on the lookout for changes in environmental regulations, they usually happen in the wake of a problem of disaster as local government authorities try to think of things to stop it happening again.
Changes in Trade Agreements
Businesses that operate internationally can be significantly impacted by changes in trade agreements. A change in a trade agreement can lead to increased tariffs, reduced access to foreign markets, and changes in the supply chain, leading to higher costs and reduced competitiveness. Examples here can be seen with the recent turbulence between US and Chinese trade. If you gain most of your supply from a country which is then sanctioned, it’s clear your business is going to somehow suffer.
Changes in Intellectual Property Laws
Intellectual property laws protect businesses’ intellectual property rights, such as trademarks, copyrights, and patents. Changes in intellectual property laws can lead to increased legal costs, reduced access to essential intellectual property, and increased competition. You should always make sure any intellectual property you own is property registered and trademarked, otherwise there’s nothing stopping other businesses from copying you.
Changes in Data Privacy Laws
Data privacy laws are becoming increasingly important as businesses collect more data about their customers. Changes in data privacy laws can lead to increased compliance costs, reduced access to data, and changes in the way businesses market to their customers.
Changes in Healthcare Regulations
Healthcare regulations can affect businesses that provide healthcare services or products. Changes in healthcare regulations can lead to increased compliance costs, changes in reimbursement rates, and changes in the way healthcare services are delivered.