As a small business owner, one of the tasks you have to face is a financial audit of your business. The audit is not only a way to ascertain the financial health of your business, but it can help uncover any organizational issues that need to be uncovered. The following tips can help you get through the process.
One of the problems that many small business owners face at audit time is finding the documentation necessary to accurately assess the business's financial status. As a result, the time it takes to complete the audit is lengthen as an attempt is made to gain as much information as possible.
Your preparation for the audit does not begin in the days or weeks before it happens. Throughout the year, you need to ensure that every single transaction is documented and that the documentation is easily trackable and organized. If you do not have a system in place to track your business's financial documentation, work with your accountant to review and select a system that works.
Hold a Planning Meeting
Prior to the audit, you need to hold a meeting of everyone who will be involved in the process. Ideally, you should hold the meeting weeks ahead so that preparation for the audit can begin.
During the meeting, you can review what needs to be done in preparation for the audit and assign tasks to each individual, if necessary. By doing this, you can avoid a situation in which duplicate work is being conducted by more than one person. Effectively strategizing with everyone will ensure that preparation work is being done.
At the start of the audit, the auditor will begin the process of reviewing the information that was provided by your business. However, it is likely that the auditor will have questions regarding the documentation. For instance, the auditor might want to verify receipts that you submitted.
If the auditor is unable to reach you, the audit could be delayed. To ensure the audit stays on track, you need to ensure that you are available to answer questions. If not, your accountant or someone else within your business who can answer financial questions needs to be available.
There are many ways that you can work throughout the year to prepare for an audit. Consult with an accountant or other audit preparation expert to ensure that your business is doing everything possible to make the experience as simple as possible.