10 best compliance management software and how to choose the right one
If you’re not worrying about payroll tax filing deadlines, you’re wondering if your state has made any recent changes to wage and hour regulations. But you don’t have time to check for updates because you’re too busy looking for a service provider to conduct mandatory training.
Compliance is an essential part of any business’s success, and the stakes can be high—running afoul of the laws and regulations that apply to your organization can result in penalties, fines, or even legal consequences. But managing compliance can come with a hefty administrative burden. You hired HR professionals to develop growth plans, source talent, and develop employee engagement strategies–not obsess over posters and handbooks.
Fortunately, many HR software solutions can automate the manual parts of HR—like payroll processing, benefits administration, and onboarding—and also offer built-in compliance support. To help you decide which compliance management software best suits your business needs, we’ll cover everything you need to know: what it is, how it works, and how to choose the right solution for your business.
What is compliance management software?
Compliance management software helps your organization meet relevant regulatory requirements, industry standards, and internal policies while minimizing the administrative work associated with compliance-related tasks, often through automation.
Example: Fresh Co., a grocery delivery service, must comply with state and local health and safety laws regarding food safety, including regular self-inspections of its storage facilities. Fresh Co.’s compliance management software issues automated quarterly alerts, notifying facility managers of filing deadlines and emailing them template reports to complete and sign.
Example: Fresh Co. operates with a lean team and does not have a dedicated finance and accounting professional. Instead, the company relies on payroll software to automatically calculate, withhold, and pay its payroll taxes to the correct tax authorities by all relevant state and federal deadlines.
Businesses can implement specialized software to automate compliance tracking and processes ranging from audits to certification processes. Instead of devoting hours—–or even days—–to complex, detail-heavy compliance work, this frees up HR professionals to focus on more creative, strategic initiatives that help your organization grow.
Challenges in compliance management
Compliance touches almost every aspect of your business, which means that effective compliance management presents unique challenges.
- Manual processes. Correctly recording, submitting, and storing information and documents needed to comply with applicable rules can eat away at the time your employees need to complete substantive work.
- Heavy reporting burdens. Proper compliance typically entails preparing and filing detailed reports that aggregate data sourced from multiple systems and departments.
- Resource limitations. Because compliance touches so many aspects of business operations, smaller and leaner organizations may struggle to find the people or the budget to dedicate to effective management.
- Ever-shifting regulations. Federal, state, and local laws and rules change frequently, and keeping up with new requirements can require significant resources. Understanding complex legislation in some industries can require legal consultation to implement properly.
- Privacy and security. Meeting some compliance obligations may require you to collect and store sensitive data from employees, customers, or users. Your organization must take steps to protect this private information from disclosure.
- Siloed departments. Organizations with siloed functions may struggle to communicate effectively and cooperate to meet important compliance obligations that cross departmental boundaries.
10 best compliance management software
1. Rippling
Rippling ASO services automate time-intensive compliance tasks and provide access to HR experts so you can stay compliant and focus on growing your business. Bring your own brokers, benefits, and workers’ compensation plans, and Rippling takes charge of administration and compliance busy work like state tax registration, handbook updates, poster distribution, and claims support.
Rippling ASO’s automated compliance monitoring covers local, state, and federal levels and updates you in real-time about changes to labor law. You’ll also receive actionable guidance that allows you to proactively address potential issues. If you’re using Rippling to build your employee handbook, Rippling automatically updates your content to reflect the most current information.
Key features of Rippling:
- Centralized compliance dashboard
- Learning management system that auto-provisions mandatory compliance trainings
- Automatic state payroll tax preparation and filing
- Automated alerts to changes in federal and local regulations
- Automated alerts to potential violations, such as wage and hour infractions
2. Bamboo HR
BambooHR offers a comprehensive collection of HR tools, including an HRIS, payroll, benefits administration, performance management, and time and attendance tracking. The platform offers a selection of built-in compliance reports and payroll tax filing and preparation.
Key features of BambooHR:
- Automated federal and state payroll tax filing
- Built-in compliance reporting
- E-signatures for important filings
- Automated tracking for employee licensing and training
3. Gusto
Cloud-based HR platform Gusto offers small businesses and startups a selection of basic payroll, benefits administration, and talent management tools. Lean teams, small businesses, and startups are likely to appreciate the clean, straightforward user experience, but larger organizations may find the selection of features lacking compared to more comprehensive HR platforms.
Key features of Gusto:
- Built-in payroll compliance management for US and international payroll
- Automated federal and state payroll tax filing
4. Workday
An AI-driven platform focused on combining HR and finance, Workday provides enterprise-level solutions for human capital management (HCM), human resource management, workforce planning, and payroll. It’s a powerful tool with robust features but requires its own dedicated team for setup and maintenance, and the complex interface isn’t as flexible as some of the lighter tools in this roundup.
Key features of Workday:
- Central compliance dashboard with tax regulation updates
- Multi-country compliance information and updates
- Pre-built payroll compliance reports
5. ADP SmartCompliance
One of the oldest, best-known players in the HR tech space, ADP has grown from a punch-card payroll system to a comprehensive suite of tools and features to fit almost any business need. While this makes for an admirably thorough solution, decades of growth through acquisition mean that many of ADP’s tools don’t communicate well, which can limit the platform’s automation and reporting capabilities.
Key features of ADP SmartCompliance:
- ACA compliance reporting
- Centralized access to employee tax documents, including W-2s, W-9s, and paystubs
6. UKG
An HCM with payroll, talent management, time and attendance, and scheduling functions, UKG also incorporates a robust set of compliance features. Workflows include built-in rules designed to track state and federal employment laws and automated alerts keep your team abreast of changes to regulations and possible violations.
Like ADP, UKG grew primarily by acquiring competitors, which resulted in limited automation and reporting capabilities across modules.
Key features of UKG:
- Built-in rules that track employment laws
- Automated alerts for potential wage and hour infractions
- Automated alerts to changes in federal and state laws
- Integrated learning management with compliance library
7. Deel
A full-service payroll and HR platform, Deel specializes in helping remote teams manage payroll and HR obligations around the world. If your team relies heavily on international contractors, Deel’s built-in payroll compliance features, capable of handling deductions and social contributions in multiple jurisdictions, may benefit your business.
Key features of Deel:
- Automated international payroll compliance, including social contributions
- Global document checklists for international onboarding
- Centralized documentation for employees and contractors
8. TriNet
A professional employer organization (PEO), Trinet offers HR support to small and mid-sized businesses, helping streamline functions like payroll, workers’ compensation, benefits administration, and compliance management. It’s important to note, though, that many of TriNet’s compliance services are add-ons that need to be purchased at an extra cost.
Key features of TriNet:
- Online reference library of claims prevention best practices
- Integrated ACA solution
- Automated payroll tax preparation and filing
9. Sage Intacct
A combined finance and HR platform, Sage Intacct promises to keep your organization’s financials “audit-ready” with a collection of pre-built and customizable financial statement and reporting tools. As an HR tool, however, it’s more limited than many other software solutions on this list. Features like time tracking aren’t included, and you’ll need to purchase a specialized plan to add payroll.
Key features of Sage Intacct:
- Centralized compliance dashboard
- Pre-built GAAP and IFRS-compliant financial statements
- Automated payroll tax preparation and filing
10. Paylocity
Paylocity is a cloud-based payroll and HCM solution that offers payroll processing, talent management, benefits administration, and workforce management tools.
As you might guess from the name, the company’s core offering comprises payroll and tax management, which includes compliance features. In addition to a live feed of updates to federal and state regulations, Playlocity also automatically alerts you when employees require additional training and certification.
Key features of Paylocity:
- Centralized compliance dashboard
- Automated I-9 completion
- Live feed of updates to federal and state regulations
- Automated tracking for employee training and certification
How to choose the right compliance management software: 4 key features
Custom reporting
Comprehensive analytics and reporting that aggregate the data that matters to your compliance efforts is essential to understanding whether you’re meeting your obligations or falling short. Sometimes, you may need to provide specific information to regulators to demonstrate compliance, making granular, customized reporting tools an essential feature.
Workflow automation
Automated workflows remove administrative friction from many compliance processes by eliminating manual work and routing key tasks and responsibilities to the right employees at the right time. Template to-do lists may suffice, but automated workflows optimize efficiency and help your team stay compliant while winning back time to focus on strategic work.
Regulatory changes tracking
Depending on the size and reach of your organization or industry, you may find yourself navigating a frequently changing regulatory landscape of federal, state, and local laws and regulations. Regulatory compliance software featuring automated alerts, ideally with suggested action items, prevents compliance violations by keeping your organization up-to-date on relevant changes.
Learning management
Education goes a long way toward preventing costly compliance mistakes. A comprehensive learning management tool can automate this aspect of compliance by enrolling employees in relevant training and courses based on role, location, or job description.
Benefits of compliance management software
Reduce legal risks
While compliance management software can’t entirely eliminate the risk of human error in your processes and procedures, it can significantly reduce it. Fewer errors means less time spent correcting mistakes and cost savings in the form of penalties, late fees, and fines.
Improve efficiency
Many compliance management tasks are easy to automate. Entrusting them to specialized compliance management software and other technology allows machines to do what they do best—rote tasks requiring a high degree of accuracy—while leaving strategic planning and creative problem-solving to your human employees.
Simplify reporting
Compliance management software can more easily aggregate, standardize, and collate large datasets to enhance the accuracy of your reports. Beyond providing regulators with the most accurate and up-to-date information available, comprehensive reports give your organization insight into possible compliance gaps and help track the efficacy of remediation efforts.
Rippling: Automated compliance management for your business
For businesses interested in streamlining one or more HR functions, Rippling ASO provides access to expert assistance without sacrificing flexibility.
If your business needs more support, Rippling PEO offers a co-employment relationship that takes payroll, benefits, workers’ compensation insurance, and EPL insurance and claims administration off your plate.
With Rippling, you get:
- HR, IT, and Finance in one platform
- Powerful and customizable reporting on any employee data
- Remote team management features, including state and local tax registration, digital onboarding, and app and device management
- Access to top-notch benefits plans with below-average, predictable renewal rates
- Automatic flagging for potential federal, state, and local compliance infractions, along with recommended action plans
- Automated processes, including ACA and COBRA administration, anti-harassment training, and distributing digital labor law posters to your employees
- Access to hundreds of comprehensive HR resources, guides, and templates
FAQs on compliance management software
What is compliance management?
Compliance management involves developing and implementing policies and procedures that ensure your organization follows legal and industry standards. A robust compliance management system helps avoid penalties and manage risks by proactively identifying and resolving potential issues.
What is an example of a compliance management system?
A compliance management system helps organizations meet external regulatory and internal policy obligations. This often involves using specialized software and other technologies to perform risk assessments, create reports, and monitor performance.
How to set up a compliance management system?
Setting up a compliance management system requires first identifying the laws, rules, and policies that apply to your organization. Next, you’ll develop processes and assign roles and responsibilities to your employees depending on the specific nature of the obligation. Consider using specialized software to automate tasks like reporting and document management. Finally, regularly monitor and review your regulatory obligations and processes to stay up-to-date and compliant.
How do you keep track of compliance?
Organizations can track compliance in several ways, depending on the scope and complexity of their needs. For some small businesses, a simple spreadsheet may be the only compliance tracking tool needed to track relevant data. At the same time, large enterprises may require custom dashboards that synthesize large data sets across multiple functions.
This blog is based on information available to Rippling as of October 22, 2024.
Disclaimer: Rippling and its affiliates do not provide tax, accounting, or legal advice. This material has been prepared for informational purposes only, and is not intended to provide or be relied on for tax, accounting, or legal advice. You should consult your own tax, accounting, and legal advisors before engaging in any related activities or transactions.
