A Business Owner's Guide to Surviving an Audit.

Most business owners dread the idea of having to deal with an audit. They are both time consuming and costly events for any business, however, properly preparing for an audit can save you time and money, while avoiding any legal trouble.

"Clear, audited reports and financial statements create opportunities for your small business. Independently verified financials can speed up the decision-making phase, preparing your small business for growth and achieving other organisational objectives," says financial advisor Elizabeth Osborne of Banking Reviews.

What Is A Financial Audit?

A financial audit assesses a business's financial accounts and related documents and procedures carried out by someone not affiliated with your company.

These events, which occur yearly, examine the business's financial performance. In line with industry-accepted auditing standards, auditors examine your financial logbooks, internal control processes, and records.

The approach might seem and feel like someone is looking through your private documents for flaws and omissions. However, financial auditors undertake this method to reassure your investors (and any concerned outsiders) of your business's financial situation.

Auditors provide investors, stakeholders and prospective partners considerable certainty, but not full assurance, and they maximise the profitability of your company's financial data. Audits are also performed to ensure that you follow legal authorities and safeguard your organisation from the danger of fraudulent financial practices.

So, how can you ensure that your audit goes smoothly? Whether it's your first small business audit or you've been through the loop a few times, keep the following suggestions in mind:

1. Get Organised

A few months or so before the financial audit, most auditors send a list of things they need from you. Examine this list and start gathering documents in an easily accessible location — such as centralised storage or drive, management software, or physical file cabinet. Make sure the documents are in the format auditors require.

2. Maintain Orderly Records Via Routine Upkeep

Auditors can complete their evaluations faster if they start with precise, consistent data. Having to wade through chaotic records or looking for reconciled items may slow down the auditing and cause the auditor's report to be delayed. Keeping pace with accounting activities is one of the most straightforward systems that keep your records in order. Don't put off reconciling your bank accounts or making inventory adjustments until the final hour. It would be best to gather as much transaction information as possible — amounts, dates, clients engaged, justifications for adjustments, and so on — and make it accessible.

While it can be difficult to maintain these responsibilities, you could consider employing or outsourcing an accountant or bookkeeper to assist you. This investment over the years can pay off —saving time for you and your auditor as well as minimising disruption for your employees.

3. Keep Auditors Informed

Keep in touch with your auditors year-round, especially before accepting a big contract or doing anything unusual. Prior information helps auditors save time and money throughout the audit process by allowing them to assist you in arranging agreements in the most efficient manner possible for the accounting methods. Constant communication with your internal auditors will also enable you to understand the details they'll need at year's end, allowing you to prepare your documents before they visit.

4. Use The Right Tools

Using the appropriate tools increases efficiency and saves your auditors' validating figures. For instance, a business with a point-of-sale facility that immediately uploads transactions to the ledger account is more efficient and reliable than one without. Consider taking advantage of the many benefits of online accounting systems. Moreover, allowing your auditors to access and run reports in real-time will save you time and demonstrate that you have nothing to hide.

Survive A Financial Audit With Solution In Accounting

Financial audits shouldn't be a stumbling block for your business. If you plan ahead of time through the year, your audits might serve as a chance to analyse and organise your business processes.

Allow Solution In Accounting Services to manage your small business accounting, bookkeeping, payroll, financial reports, and Business Activity Statements (BAS) and Instalment Activity Statements (IAS) and lodgment with the ATO so you can focus on what you do best. We handle the paperwork, double-check the data, and professionally submit your reports.

If you'd like to talk to one of our accountants about your audit preparations, book your free consultation available for all business owners or call us at 0405 012 345.