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82% of small businesses fail due to poor cash flow management skills, according to research done by the U.S. Bank. With other causes of business failure including a lack of a well developed business plan or being overly optimistic, there’s no question that business compliance regarding financial management is a necessity to cultivate success, regardless of company size. While there are a myriad of financial management points to consider within a business, here are just a couple that are particularly imperative if you’re new to the game.

The importance of proper record keeping

Keeping records is a daily task in any business, though when it comes to financial management, proper record keeping is a must —  especially when complying with regulations 17a-3 and 17a-4, both of which are two key components located in subsection 17a of the US Securities Exchange Act 1934. These regulations involve the need for broker/dealer books as well as record requirements, and requires that brokers or dealers create and preserve comprehensive records —  including written and digital communications, in addition to the requirement that data be stored in formats that aren’t able to be erased or rewritten. The penalties behind 17a-3 and 17a-4 include fines upwards of $150,000 as well as potential bans/suspensions, highlighting just how important compliance is.

The role that security plays

For businesses that accept online payments or store financial records digitally, financial compliance also involves keeping the business’ and customer’s data safe and secure. With important compliance regulations including both Payment Card Industry Data Security Standard (PCI DSS), and the Sarbanes-Oxley Act of 2002 (SOX), each of which are quite vital regarding the security of sensitive data. PCI, for instance, is designed in order to ensure that companies that deal with card data during a transaction (including accepting, processing, or transmitting such data) maintain a secure environment, though it’s necessary to keep in mind that different compliance levels exist depending on the factor of how many transactions your business performs in a year. On the other hand, SOX, according to, is known for protecting shareholders and the public by improving accuracy of corporate financial disclosures. With penalties for those who aren’t compliant, these two regulations should certainly hold a place in any business’ financial plan when need be.

How a financial plan can help

Thankfully, when ensuring that your company is financially compliant with the law, a detailed financial plan can be of massive help, especially since such regulations can seem overwhelming as a new business owner. With a comprehensive financial plan including compliance goals, any deadlines, and a strategy as to how your business will set out to be compliant, you’ll be able to navigate financial aspects much easier. And, while it might sound simple, another thing that can help when planning is creating a checklist, which will aid greatly when getting a comprehensive overview of what needs to be done in regard to financial compliance matters.

As much as being financially compliant as a business is important, it can often become overwhelming —  especially if you’re a new business owner or if you’re newly in charge of such matters. However, by familiarizing yourself with the necessary compliance regulations —  such as PCI, SOX, and record keeping regulations, and keeping a detailed financial plan, you’re sure to minimize your risks and cultivate success.