For an individual, a financial audit is often a taxing experience. However, when it comes to a financial business audit, the level of intensity escalates. This is especially the case when it comes to a small business with limited experience about the process and limited staff to help in the organizing efforts. If this sounds like your scenario, there are some things you can do to ease the burden while still ensuring you're adequately prepared for the situation.
Validate Your Records
Particularly if your audit is for tax purposes, make certain you're validating your financial claims. In terms of a tax return, this would include records that back up certain tax credits or expenses you've claimed and checks that validate payments received to present evidence for income.
If you're unable to back up this information with facts, you could have these credits and expenses eliminated from your claimed returns, and that can lead to higher tax payments and even new penalties. In terms of an audit for a contract, a loan, or some other business transaction you're trying to be awarded, the same process of validating any claims you're making concerning your financial health is important.
Look for Failures
In realistic terms, one of the main functions of an audit is to look for things you've done wrong—basically any mistakes you've made. In many instances, the results of an audit have financial implications that can be costly depending on the purpose of the audit. If you can highlight and correct errors beforehand, this can be of great benefit.
At the same time you're validating your records, you should also focus your attention on spotting any mistakes that may have been made along the way. Use this period as an opportunity to fix these issues so that they're already taken care of before the audit.
The more organized the information you present during an audit, the shorter the amount of time the audit will take and the greater the level of accuracy involved. Once you have collected all the information to validate your records, reorganize them in a manner that is easy to understand and easy for someone who is not a part of the company to navigate.
This process can include everything from the order in which files are organized to how they are labeled. Understand that this same process is important when it comes to your digital files. Ease of access is critical to an accurate and fair assessment.
When preparing for an audit, make sure you aren't overlooking the aid an audit-preparation company can afford you from. From reviewing your information to organizing it for the audit, they can assist you with each step.Share