Navigating Financial Compliance in Small and Medium-Sized Enterprises (SMEs): Overcoming challenges and implementing effective solutions

Halima Oluwabunmi Bello 1, *, Courage Idemudia 2 and Toluwalase Vanessa Iyelolu 3

1 Independent Researcher, Georgia, USA.
2 Independent Researcher, London, ON, Canada.
3 Financial analyst, Texas USA.
Review Article
World Journal of Advanced Research and Reviews, 2024, 23(01), 042–055
Article DOI10.30574/wjarr.2024.23.1.1984
Publication history: 
Received on 23 May 2024; revised on 28 June 2024; accepted on 01 July 2024
Financial compliance is a critical aspect of business management, particularly for Small and Medium-Sized Enterprises (SMEs). These enterprises play a vital role in economic development, yet they face unique challenges in adhering to financial regulations. This review explores the importance of financial compliance for SMEs, the common obstacles they encounter, and effective strategies to overcome these hurdles. SMEs often struggle with the complexity of regulatory requirements, limited resources, and the high cost of compliance. Additionally, the lack of standardized regulations across regions and industries, coupled with rapid technological advancements and cyber threats, further complicates compliance efforts. The significance of financial compliance for SMEs cannot be overstated, as it ensures legal conformity, builds stakeholder trust, promotes sound financial management, and facilitates international expansion. By maintaining compliance, SMEs can avoid legal penalties, attract investment, and achieve sustainable growth. However, the path to compliance is fraught with challenges that require innovative and practical solutions. This review outlines several strategies to help SMEs navigate financial compliance effectively. These include leveraging technology to automate compliance processes, investing in staff training to enhance regulatory knowledge, and seeking external expertise when necessary. Additionally, adopting a proactive approach to financial management, such as implementing robust internal controls and regular audits, can significantly enhance compliance efforts. The discussion emphasizes the need for a supportive regulatory environment that considers the unique constraints of SMEs and provides tailored guidance to aid their compliance journey. By addressing these aspects, this review aims to empower SMEs to overcome compliance challenges and implement effective solutions, ultimately contributing to their growth and the broader economic landscape.
Financial compliance; Smal and medium-sized Enterprises; Regulatory Requirements; Risk management
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