Audits are often seen as a bad thing for businesses, usually carried out by the tax man. However, did you know that carrying out regular audits of your company could actually be a good thing?
Here, you’ll discover why it’s a good idea for businesses to have regular audits and the benefits they can provide.
Who Benefits From An Audit?
The truth is, everyone involved with the business will benefit from regular audits. If you own the business but you’re not really involved so your manager carries out the annual financial reports, an audit can help you to discover whether the records produced are accurate.
Even if you’re the one in charge of the annual financial reports, there’s still a chance errors could be made, so an audit would confirm everything is correct. A lot of businesses, for example, find their accounts are estimated, so an audit can help clear up any potential errors resulting from the estimations made.
Main Benefits Of Regular Audits
There’s a lot of benefits that come from having regular audits; especially if you use a professional auditing company, the main ones being:
- Prevention of fraud
- Reassurance for stakeholders
- Keeping lenders satisfied
- You control who carries out the audit
- Helping you to plan for the future
While it doesn’t happen very often, businesses are always at risk of fraud. An audit can determine whether there are any irregularities in accounting. They are also capable of detecting numerous types of fraud, so in essence, they can significantly help protect your business.
If you have stakeholders, investors or lenders to deal with, financial audits can also provide great reassurance. Stakeholders and investors particularly want to have a clear view of a business’s finances that they’re involved with. If they don’t see evidence of how well the business is doing, they could withdraw their investment and shares in the company; leaving you in a potentially dire financial situation.
Then there’s the fact you get to control who does the audit. If one is requested by the tax man, they choose who carries out the audit and you have zero control over the process.
Finally, regular audits are a great tool which can aid you with planning for the future. You’ll get to see exactly where you’re making losses and also highlight why you could be losing money. You’ll also get to see where the company’s strengths lie, enabling you to see where bigger investments could be made to further boost your profit margins. All of this information helps you to create a solid business plan.
Overall, audits may seem like a hassle, but they do bring many benefits to your business. The above are just some of the main advantages you’ll experience using an auditor of your choosing. The fact they can help keep the tax man and your stakeholders happy is reason enough to incorporate regular audits into your business strategy. – For more financial tips here on Bit Rebels, click here!