How to prepare for an audit as a small business

Maintaining company finances can be difficult for even the biggest conglomerates. For small businesses, issues can quickly be compounded. Whether it's a lack of time, resources, people or a mixture of all three, getting accounts in order can quickly slip down the list of things to do.

However, there are no excuses when the organisation is either revamping its internal processes or is selected for an audit. Everything needs to be at hand, up-to-date and correct in the eyes of the tax authorities. So, how do small businesses prepare for an audit?

Dust off the files

The information required for an audit is likely to stretch back months, if not years. Consequently, it's important to keep an open mind when trawling back through any records. Ensure that tax returns, invoices and other items are all accounted for, and that – most importantly – the appropriate figures match up.

The overall quality of business processes will benefit, if the finances are properly looked after.

Of course, this whole process is made much easier when files are easily collated, which ushers in the next point:

Implement technology

Keeping track of the facts and figures is made infinitely easier if the business is able to use applicable technologies. Specifically, there are a whole host of software packages out there that can collate everything together, and by their nature, are unlikely to make mistakes.

Moreover, even if the company is especially set in its ways, there are options which are both cost effective and incredibly easy to use.

Think on the benefits

While an audit from the tax authorities may not be especially welcomed and getting the appropriate paperwork together is going to be overly time consuming, there are added benefits once the company accounts are in the best of health.

Small businesses will often heavily rely on outside investment to progress them to the next level. In research on the auditing process carried out by PricewaterhouseCoopers (PwC), it was outlined that companies seeking external injections of capital will be more likely to find success, if their accounts are up-to-date.

Moreover, PwC also maintained that the overall quality of business processes will benefit, if the finances are properly looked after.

Consult the professionals

While the process of going through an audit may seem daunting, taking the first few steps alone isn't necessarily too difficult. However, in efforts to avoid any surprises further down the line, it's best to consult with the professionals to make sure all of the applicable facts, figures and paperwork are perfect.

At WMC Accounting, we believe that an impending audit shouldn't be viewed as a looming threat, but a chance to review the entirety of your business. If you're in the midst of preparing for an audit, or would like to find out more about what we can offer, click here to get in touch.

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