The very utterance of the word makes even seasoned businesspeople cringe and cower in fear.
“Audit? Why do we need to do an audit?”
OK, before you go into hiding and crawl into the fetal position in a corner, let’s stop and realize just what an audit is, the kinds of audits there are and that an audit can actually be a good thing.
“Really? Oh, pray tell, please continue,” she said.
Actually, there are nine different types of audit. And they all play a role in the success—or failure—of your business:
- IRS tax (the one we all think of)
- Information system
Audits are a way to objectively examine and assess a company’s performance—operational, financial, and other aspects of the company—to ensure things are working and where there might be room for improvement. They all involve:
- A review
- Assessment of findings
In many cases, audits are a legal requirement. But in the end, they all are about measuring performance and compliance with some entity’s rules. While having the IRS look at your books is daunting at the very least, if you are complaint and have kept up with your books, it will be a valuable exercise and worthy of lessons learned.
For more on how to manage your finances and use audit to your full advantage, call or write to us. TFO Solutions is dedicated to helping entrepreneurs and business owners with their financial strategy from the back office to the boardroom.
*photos courtesy of Unsplash (Stephen Dawson, Markus Winkler and Mwangi Gatheca, photographers)