Rules costing Aussie businesses $250 billion annually, Deloitte finds

Just as investing in business insurance is a critical way to manage risk, rules are usually implemented to lessen threats and dangers within an organisation. For instance, when businesses abide by governmental regulations around collecting personal identification information, they protect their consumers and employees against fraud while also safeguarding themselves against the consequences of data breaches.

However, in your small or midsized enterprise (SME), you probably have a lot of policies and procedures in place that aren't directly from a piece of legislation. You may have developed your own approach to maintaining a safe worksite or keeping track of company funds, for example. These efforts can be incredibly vital to the longevity of your company, but the way you implement them could be costing you big in terms of productivity.

That's what a recent study by Deloitte uncovered: Australian businesses are losing up to $250 billion annually in costs and productivity hits because of the way they institute rules and regulations. Self-imposed "red tape" amounted to a greater expense than public sector bureaucracy, costing $155 billion each year.

Where do these expenses come from? Much of it has to do with time - including both documentation in general and processes that aren't designed to be efficient. Deloitte gave a few examples, including:

• Waiting lengthy periods for approval for taxi fares or other company expenditures
• Requiring workers to sign off on certain parts at a specific location, causing them to walk kilometres daily instead of simply arranging for them in advance
• Implementing burdensome and inefficient password practices, such as separate sign-ins for each program
• Rejecting applications from potential patrons because they used the wrong colour ink

What can you do about these obstacles? For any area of your SME - compliance-related or otherwise - it's helpful to regularly evaluate your procedures with a mind to streamline workflows and reduce unnecessary paperwork.