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When it comes to running a business, a whole company audit is a wise move. Even if you fall under the threshold where one is legally required, it is still worth choosing to do anyway. Whether you opt for an internal or external method, either can bring some key benefits. Unfortunately, you may feel that it is too time-consuming or it will simply get in the way of your usual business operations. While this is quite natural, you should really try to look at a company audit as a way of helping your organisation grow and stay safe.
Why is an audit a great idea for businesses in the UK?
Let an audit flag up any issues for you
An audit involves an internal team of people or an external independent auditor checking your financial records and company procedures to make sure that you have an accurate record of your dealings.
It also provides a great way of uncovering any issues of which you may or may not be aware. For example, you may come across the fact that your business was mis-sold PPI on a previous business loan you took out. You will then be able to make a PPI claim to recover the cost if you feel that it is necessary – the PPI deadline is August 2019.
An audit can also uncover any unknown issues around the correct procedures not being followed by staff or financial dealings not having been done in the correct manner. This will help you identify and resolve any such issues before they become a bigger problem.
How can you get ready for your next company audit?
Much of the secret to making an audit work for you is in the preparation. Here are a few ways to make sure that you are ready when the auditors arrive:
Meet with your auditors beforehand – it is always a good idea to try to meet with your auditors before the actual audit begins. This will allow you to inform them of anything that they may need to know about before they arrive and also give them a chance to communicate any important information to you. Many companies will also ask for a Prepared by Client list at this meeting, which will allow you to get a handle on the type of information that they plan to look at in advance.
Index a list of information given – the chances are that for most businesses, the auditors will ask for quite a bit of information to review. To avoid any confusion, compile your own list of the information that you give to them that is indexed to correspond with their Prepared by Client list. This will also benefit you in making sure that you have given them all the documents they have asked for.
Get up to date – before the audit starts, it is vital to get all your filing systems and document storage up to date. You do not want to do this once the auditors have arrived because you can’t find what they require. You will usually have some notice of their visit, so start doing this a few weeks ahead to have plenty of time.
Ask for a break – if the audit is for a large company, then it may be a multi-week engagement. This can obviously impact on the daily operation of the whole business as staff are helping provide information to the auditors. In these cases, it can be a good idea to ask for a break of a few days in the middle to allow you to catch up with your normal business.
Reconcile through the year – a common mistake is to leave all your financial reconciliations until year-end. The issue here is that you may miss issues that arise during the year and then have to sort them all out when they are spotted in the audit itself. It is a much better idea to reconcile your accounts on a quarterly basis to avoid this and pick issues up sooner to resolve.
Company audits need not be a hassle
When it comes to a company audit, the temptation is to view it as a hassle that you could do without. However, it is actually a really useful tool to keep your whole business operating as it should and within the relevant legal parameters. Not only will it make sure that you are providing the service you should be, but it will also help flag up where your business may be owed money or could receive some kind of direct business benefit. Much of the work is done beforehand, and with the right preparation, the audit itself should run smoothly by the time the auditors arrive.