Six Reasons to Audit Your Business
When running a business, it really is essential to stay on top of the paperwork so you can continue to successfully grow your business.
The busier and more profitable the business becomes, the more important it is to have a handle on your finances. Frequent auditing of your financial records are the way to achieve this.
Crosschecking Performance
The larger a business grows, the more important it is to keep track of who is accountable for what. This is especially true when shareholders are on-board and accountability is a demand. Managers need to ensure they are keeping up to date with providing accurate reports as far as they can, but there is no substitute for an independent audit of financial statements to crosscheck performance.
Financial Accuracy
The tax office, financial institutions, and management can all benefit from seeing audited financial statements. With an independent financial audit, tax officials can rely on the accuracy of the information you provide for their own calculations and decisions, for example.
Business Tip
One of the best reasons for auditing financial statements is to future-proof yourself. In the long term, an audit protects your hard work and investment.
Reasonable Assurance
Whilst no audit can provide 100% accuracy and assurance, it can certainly go a long way. A level of reasonable assurance can absolutely be obtained from a well-carried out audit, potentially saving any later recalculations or corrections of misstatements.
Up-to-Date Information
A small but very significant detail is that an audit will provide a complete report on the shape your business is in. The valuable thing to appreciate here is that it’s often what doesn’t get reported that makes all the difference. Having complete records means that whatever happens, you’ll have comprehensive and up-to-date information when you need it.
Protecting Your Business
When it comes to protecting your business, an ounce of prevention is worth a pound of cure. If you’re not aware of any potential issues or glaring gaps, you have no power to fix them. This is the key to an audit’s value and could even make the vital difference between the success or failure of your business.
Stabilizing Your Credit Rating
Regular or continuous auditing of financial statements can help to stabilize the credit rating of a business, provide assurance to would-be investors, and even keep the bank on your side in the event you need to take out an unexpected loan.
If you’re still looking for reasons for auditing financial statements, think of it as necessary housekeeping. Your products and services look after your customers, your profits look after your business, and your auditing looks after the creditors, lenders, and financial angels who look after you.