When running a business, there are many different audits that you can get in order to improve your business. A financial audit is a little different though as it’s making sure you’re paying everything correctly and that you’re not trying to hide additional money that you’re not declaring to the taxman. So with this in mind, here are some tips to prepare your business for auditing.
Get Professionals To Do Your Bookkeeping
Your bookkeeping as a business needs to be spot on because if you mess up the numbers, then you are likely to run into problems when the auditors arrive. So whether you are a small or big business, you want to ensure that those responsible for doing your books are experts in the field and know exactly how to record and monitor your income and expenditures. There should be no room for error and if you haven’t got the ability to have it done in-house, then ensure you’ve picked the right company when outsourcing this work. There’s plenty of accountants out there and agencies to use, but you want one who is going to be able to suit the needs and requirements that your company expects.
Be Organized With Your Filing
When it comes to your filing, don’t just keep it stored in a cupboard in a mess because when it’s presented to the auditors, they aren’t going to be best pleased. This will likely make them do more digging, and if there’s anything out of line, then they’ll certainly make sure you are held accountable for it. Try to do your best to keep your filing in order and organized as best as you can. Not only does it help the organizers but it benefits you and your financial team in making sure that nothing is going missing or becomes a problem because you haven’t made an effort to keep everything neat and in order. As a back-up, you might want to ensure that you have the best legal representation in terms of a tax audit lawyer, should you need one.
Keep All Financial Records No Matter What
You’re told with your personal financial records that you should hold onto them for a couple of years, more so if you’re self-employed. When you own business though, you really want to make sure you keep hold of them for several years, particularly if you don’t get audited that regularly. You want to hold onto every receipt, invoice, and expense so that if the auditors ask for more of a history in terms of financial records, you can happily provide these without any hassle. It also shows the auditors that you have nothing to hide if you’re happy to provide those financial records further back in the past when perhaps your business was still growing.
Be Accommodating To Their Needs
As far as auditors go, the job of an auditor can be pretty monotonous, and some auditors can be on the move constantly as they go from business to business. So you want to treat them with respect and to cater to their every need. If they ask to speak to different colleagues or departments, then make sure this is a priority that everyone in the business understands is essential and should be expected to make their time free as and when it’s needed. Even if they ask for things last-minute or things that you might not have been expecting, do it.
Provide Them With The Right Working Conditions
Try not to just shove the auditors into a box room where there’s little light and away from the rest of the building. Be accommodating and thoughtful about where you put them. Provide them with some drinks throughout the day or set up thermals in the room so that they can help themselves throughout the day.
A business audit especially when it involves the finances, needs to be taken very seriously. If you haven’t sorted out your finances and they need looking over, make sure you do this before the auditors themselves arrive. You don’t want to have the pressure of them in the building and then having to run back and forth to get everything. Have it all ready for them when they arrive.
Disclaimer: This content does not necessarily represent the views of IWB.