As your SME moves into a more advanced phase, your critical business numbers will inevitably go along with it. More than anything else, this means you need to pay closer attention to your business finances. You can do this through an internal financial audit. A financial audit works well in keeping profit initiatives in check, ensuring compliance with accredited accounting regulatory bodies and protecting you from fraudulent business transactions. If you want to take a dip into financial audit, here’s a basic checklist that can serve as a guide:
Put everything in writing.
Documenting financial statements and other pertinent business financial information is very important when it comes to financial audits. Proper documentation enables you to prove your claims; it also gives you the upperhand when it comes to the resolution of conflicts and disputes. Prior to being audited, make sure you are keeping track of everything -- whether the transaction is manual or electronic in nature.
Review major contracts.
Every business have sets of major contracts which are essential to the upkeep of their cashflow. To prepare your SME for a financial audit, consider reviewing major contracts. This is important in understanding the overall financial status of your SME, especially since major contracts have a great impact on your business finances. Ideally, you should be able to explain specific terms, concepts and best practices to the auditors to keep all parties on the same page.
If your business is required to comply with certain business regulatory bodies, make it a point to keep the certification on hand. Having these certifications ready will help you prove your eligibility in conducting your business operations. This will also quicken the pace of the financial audit process.
A financial audit is a tedious process as the auditors will likely turn your business financial documents upside down. To make it more efficient, aim to be clear on the separation of duties and responsibilities. Clarifying tasks and separating duties will help you and your business to point out which specific person or department is in charge of the item in question.
Being prepared for a financial audit is one of the best defenses you could ever build for your business. Do it right and you won’t get into any trouble with the Canada Revenue Agency.
Eager to seek help about your finance and accounting requirements? Get in touch with our qualified advisers at D&V Philippines.