Just thinking of an audit can cause tension and anxiety for many business owners. The notification of an actual audit can be stressful, causing a rush to find crucial papers, perform bank reconciliation, and otherwise “get things together.” However, the reality is that almost every financial document an auditor wants to look at also directly benefits the company’s owners and managers.
Strict bookkeeping procedures keep a business “audit-ready” at all times, reducing the stress and anxiety associated with the audit procedure. Owners and managers can benefit from the same data that auditors are interested in looking at by using it to guide better business decisions in all areas.
How Investing in Bookkeeping Services can Keep you Ready for an Audit?
The condition of a company’s books will either directly or indirectly affect any form of audit. Let’s look at some ways that investing in bookkeeping for small businesses may make the audit process smoother and less stressful, as well as ensure that owners and managers have the best resources to continuously evaluate and improve the business.
1. Making the Income Statement and Balance Sheet work for the Company
The inputs to the balance sheet and income statement should be examined by the auditor during a financial audit to check for any serious misstatements. This procedure will be made easier with proper bookkeeping, but the business will also gain a lot from it. You can seek help from bookkeepers in Melbourne to prepare financial statements for your company. For instance, when the inputs to the balance sheet are consistently correct and up to date, business owners and managers may reliably study them to analyse liquidity and evaluate solvency. Similarly, when the income statement is up-to-date and accurate, companies can use it to assess revenue streams and explore new growth opportunities.
2. Cash Flow Forecasting
The inputs to the statement of cash flows will also need to be examined by the auditor during a financial audit. This information will always be current and audit-ready if a strict bookkeeping mechanism is followed by an expert Melbourne bookkeeper. But there are many more advantages to having accurate data. Owners and managers may securely pay their financial obligations, retain liquidity, and invest in growth prospects by thoroughly understanding, analysing, and improving their cash flow status.
3. In-Depth Analysis of Accounts Receivables
You can’t overlook the importance of accounts receivables analysis, but it needs the same best bookkeeper to manage accounts receivables as a financial auditor. With accurate and up-to-date data, businesses would be able to answer questions like: Are we getting receivables on time? Will we have sufficient cash to meet other business requirements? Thus, make sure to choose the best bookkeeping services in Australia for your company.
4. Keep an Eye on Fraud
The purpose of any financial audit is to check if there is any fraud occurring within the company. Properly managed business books allow business owners to prevent fraud from occurring. Regular bank account reconciliation, proper record management, and identifying any suspicious activities can discourage fraud.
5. Reduce Your Tax Burden
Nobody wants to pay more than necessary, especially tax penalties for not meeting tax rules or lodging taxes late. However, keeping your business books ready for a tax audit can ensure that the business is getting advantages of tax laws. If you want to reduce the tax burden, you can seek help from a professional tax accountant, and if you want an accountant near your area, you can also search for ‘accountant near me’.
6. Increase Peace of Mind
Business owners may face auditors with confidence when they are confident in the accuracy of their bookkeeping. They can also devote themselves and their manager more effectively to the business process. The entire team can devote all of their time and energy to running and expanding the business once the stress and scrambling that come with trying to catch up with the auditors is off the table.
Proper bookkeeping is not only about getting ready for audit, it is important for business owners and managers to make the right business decision and enhance business operations. To get accurate and best bookkeeping solutions for your company, you can get help from a Reliable Bookkeeping Services provider.