Compliance

What is compliance?

Compliance means following the rules. For businesses, this includes tax laws, employment regulations, industry-specific requirements, and accounting standards. Staying compliant keeps you out of legal trouble and protects your business from fines and penalties.

For small contractors and business owners, compliance typically focuses on tax obligations, proper invoicing, and maintaining accurate financial records.

Common compliance requirements

Small businesses typically need to comply with:

• Tax filing — Submitting accurate returns on time (federal, state, local)
• Sales tax collection — Charging and remitting sales tax where required
• Employment laws — Proper classification of employees vs. contractors, payroll taxes
• Record retention — Keeping financial documents for required periods (typically 3-7 years)
• Licensing — Maintaining required business and professional licenses
• Insurance — Carrying required coverage for your industry

Staying compliant

Good record-keeping is the foundation of compliance. Use accounting software that creates proper documentation, save receipts and invoices, and work with an accountant or tax professional who understands your industry's requirements.