Compliance Cost

Compliance cost refers to the expenses that individuals or organizations incur to adhere to laws, regulations, or standards set by governments or regulatory bodies. These costs can include fees for permits, expenses related to reporting and documentation, training employees, or implementing specific systems to ensure rules are followed. While necessary for legal conformity and promoting safety or ethical standards, compliance costs can burden businesses and impact pricing, particularly for small companies. Understanding these costs is crucial for evaluating a business's overall financial health and operational efficiency.