November 13, 2019
The words “financial audit” can trigger nerves in any small business owner. Even though you know your financial reports are processed according to industry standards, it can be intimidating to be under evaluation. Keep reading to find out how you can make sure you have a successful audit and not be subject to further investigation, and don’t forget to contact Frank W. Kapitza & Associates if you need further help with preparation.
1) Plan ahead. Audits don’t happen by surprise. You will know ahead of time when your audit will be taking place. Use the weeks or months before the audit to prepare your documents and make sure they are up to standards, saving yourself the headache of having to do it all the day before. This also gives you time to fix any reporting errors and get your employees up to speed on the proper reporting procedures.
2) Consider any changes that have occurred during the year. Major changes that have occurred within your organization during the year, such as the elimination of a department or a raise in employee salaries, may warrant a change in reporting practices. Communicate these changes to your auditing team so they know what to expect to keep the process going smoothly.
3) Use a document management software. Good document management software can be affordable but still help you keep ample track of your reports. Having to dig through a clutter of papers on your desk when the auditor asks you for certain documents is never fun, and a good DMS that you know how to use effectively eliminates that pressure.
4) Find an auditing team that is experienced and understands your business. This step is important because financial reporting practices differ in every industry, and if you pick an auditing team that is out of touch with yours, it can lead to miscommunication and biased pricing and results. Know what to look for when you hire an auditing team to ensure a collaborative effort.
5) Communicate effectively with the auditing team. During the whole process, you should be available to speak with the auditing team, whether the audit is on-site or remote. Listen fully to what the team has to say and acknowledge the areas in which you need to improve, if any are given. This keeps you in good standing with the team so you can potentially use them again for your next audit. Being available also provides you an opportunity to gain deeper knowledge of the industry and its procedures.
6) Debrief with your employees after the audit. Whether the results of the audit were positive, negative or a little bit of both, hold a brief meeting with your employees after it is over. If it did not go as well as you hoped, relay what the auditing team had to say and make sure your employees know where and how to improve. If it went well, congratulate them on a job well done and share the positive feedback of the auditors.