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As a small business owner, certain areas should be considered essential to ensure you complete on a regular occurrence. These include things such as reviews of practices, your employee HR, and internal and external audits. But what does an inspection entail? It’s often something that goes unconsidered as a small business, but it should be something that’s classed as critical. Have a look at this short guide for a few starting points.
What Is A Small Business Audit?
A small business audit is basically where an examination of all the business’s accounting books and tax returns takes place to ensure they are accurate and comply with relevant laws. Many companies make sure they conduct at least an annual internal audit, but you may also be externally audited too, using something such as CASS solutions from Autorek can be useful for making sure checks run smoothly. An audit is simply a quality control method to ensure the accuracy of your business financial records.
How Can An Audit Benefit Your Company?
There is no need to be intimidated by an audit, it can help your business to become more productive, and this means you can plan better for the future. Some benefits include:
- Investments- If you’re ever looking for investors for your funding, then having a clear record of any audits and the details of improvements you’ve made will give them the confidence to invest.
- Improve Productivity- An audit is a brilliant way of highlighting any problem areas.
- Taxes are easier- If you already complete a regular audit then your taxes are going to be a lot easier, whether you outsource to an accountant or deal with them yourselves, you’ll both be thankful for the auditing.
You should be thinking of an audit as a quality control method that will ultimately improve your business’s efficiency.
What Actions Should You Be Taking?
To complete an audit for a small business can be a lot simpler than doing one for more substantial businesses but just as advantageous. Some of the things you can get ready in preparation for an audit include:
- Expenses- A clear and detailed list of any costs that have been taken from the company.
- Income- A clear picture of every single penny that has come into the business.
- Employee list– It’s good to not only make sure you have all the relevant information, reference and contact details for employees but also have a copy of training completed, access that has been granted and any security checks that have ever arisen.
- Financial statements- Print off or allow access to all bank accounts used plus any other commercial platforms such as Paypal.
These are just a few areas to include in your audit to get you started there are many more, and it often boils down to each company, none is the same. When an examination is finished, you should compile an audit report. Any findings should be shown clearly along with the auditor’s identity. Any discrepancies should be highlighted. It’s a good idea to have a chart of actions need and order them from immediate action required to say six months to solve the problem.
Although performing an audit is never fun and it’s not something that should be shied away from and if you make it part of your working practice it will soon feel like just part of the normal runnings. Are there any other tips and advice that you could share in the comments section below?