Almost every type of business requires some form of license. Unless you are a sole proprietor with no employees, chances are you need to license your business with a state or local office. If, on the other hand, you are a multinational corporation with offices in a multitude of jurisdictions around the globe, your licensing obligations are likely overwhelming. In many cases, companies must register for all appropriate licenses for each geographic location in which they operate. In addition, they often need to file multiple licenses for each division or legal entity, or, at times, for each department.
This onslaught of bureaucratic red tape can become a true swamp. Most businesses deal with licensing on an as-needed basis, relying on staff in the legal or operations department to wade through the regulatory morass in an attempt to keep the organization on top of complex reporting requirements. The results are typically a series of decentralized, disorganized systems that have been cobbled together on an ad hoc basis. Consequently, it should come as little surprise that many companies struggle with licensing gaps that can result in penalties, fines, work delays or even criminal charges.
6 Ways Business License Management Software Can Help
#1: Creating a Centralized Repository: One of the first benefits of Business Licensing Management Software (BLMS) is the creation of a centralized database for processing all license requirements. Rather than having your licensing initiatives scattered on various spreadsheets throughout the organization, BLMS can create a single repository for all license-related documents. This web-based database can be password-protected, but easily accessible for all appropriate employees. A centralized license database makes it possible to locate, sort and filter licenses, recover lost renewal notices and forecast license renewal spending.
This enhanced connectivity allows management to monitor and track licensing operations across the organization. BLMS also offers easy access to master copies of all license-related documents, which facilitates the creation of compliance reports and audit materials.
#2: Build a Customized Licensing Calendar: Another advantage of BLMS is the creation of an in-depth licensing calendar for your organization. License renewals and updates can be staggered across the calendar year, requiring careful attention in order to keep current. BLMS creates a master calendar that can alert responsible parties of upcoming license renewal dates in time for them to take appropriate action. Because in some jurisdictions, license-processing can take up to eight weeks, a customized licensing calendar can help the company avoid the costly penalties associated with operating without a license.
#3: Automate the Licensing Process: As an added option within the BLMS Licensing Calendar, users can create automated autorenewal systems for select licenses. Automating the process can assure the company that all license requirements are processed on time and can avoid the possibility of human error. In addition, the convenience of automated renewal systems means that licensing procedures create as little disruption to your workflow as possible.
#4: Conduct Licensing Research: How do you know what licenses are needed for a given jurisdiction or industry? Many BLMS systems offer a Business License Wizard tool that is customizable by industry, jurisdiction and region, assuring that your company is made aware of all regulatory and licensing obligations. BLMS products include a library of license data, and more than 100,000 forms and documents covering both domestic and international licensing authority.
In addition, some BLMS products also offer live research assistance through a team of licensing professionals who can evaluate your specific company needs and advise you on which licenses are required for your next venture.
#5: Track Events Likely to Trigger New Licensing Requirements: There are many moves a business can make that may necessitate changing or updating their existing licenses. For example, if a business changes its name or if a smaller business decides to incorporate, that business must complete the appropriate licenses for its new identity. Similarly, if your organization begins to offer new products or services, those new ventures might require the addition of state or federal licenses. Finally, if the company expands into a new geographic location, a new round of license applications is almost assured.
#6: Avoid Fines and Penalties Due to Non-Compliance: The need for businesses to maintain compliance in regards to business licenses should be abundantly clear; nevertheless, every year, organizations run afoul of the law for exactly this reason. At times, these occasions might have been the result of ignorance or neglect, but the ramifications on the company are no less serious, regardless of the cause. So often, we see that the cost of maintaining up-to-date license is nominal compared to the fines and other damages the company must pay for failure to do so.
For example, according to Harbor Compliance:
- In August 2017, the Oregon Construction Contractor’s Board issued more than 60 penalties totaling over $146,500 to contractors for advertising, bidding or performing work without a proper license. The fee for a two-year license is $325.
- A Pennsylvania funeral home was charged $10,000 for operating with an expired license. The cost of renewing that license? Only $35.
- In November 2016, a human resources start-up was fined more than $7 million by the State of California for allowing employees to transact insurance business without a license. In comparison, the insurance agent license they needed would have cost them $170.
In addition to the fees that may be incurred for operating without a license, your company may suffer from damages ranging from disciplinary action to criminal charges. Businesses are required to report disciplinary actions to other jurisdictions in which they have licenses, and, in some instances, company executives may be required to appear before licensing boards for disciplinary hearings. These and all other disciplinary actions become a matter of public record, reflecting poorly on your company’s reputation for good will and fair business practices. This could hamper your business’s ability to form new partnerships or attract new clients.
Leverage Technology for Licensing Compliance
Business License Management Software can take the time-consuming frustration out of maintaining your company’s licensing obligations. With the help of its license calendar and automated filing options, you can eliminate late or absent filing and the attendant penalties and fees that go along with it. By centralizing your licensing initiatives, BLMS creates a safe, accessible database for storing all license-related documents that is ready to be used for compliance reports and audit filings.
If you have questions about how Business License Management Software can benefit your company, contact a Blueprint representative for more information.