Today, let’s talk about something that might not sound as exciting as the latest business trends or groundbreaking innovations but is crucial for your company’s well-being – internal audits. At Moose Creek Bookkeeping, we believe that understanding the why and how of internal audits can be a game-changer for your business’s future.
We get it, sometimes it’s easier to avoid potential issues or daunting projects by putting them on the back burner, but this is not one of those things to be ignored. Let’s look at why comprehensive audits are critical to every company’s financial and legal health. When regular audits are performed every aspect of your business becomes more transparent.
Here are four main reasons for performing internal audits:
Identifying Issues Early: Help identify potential issues before they escalate. Whether it’s financial discrepancies, compliance issues, or operational inefficiencies, nipping these in the bud ensures better practices moving forward.
Ensuring Compliance: The regulatory landscape can be challenging to navigate. Internal audits ensure your business stays compliant with local, state, and federal laws and regulations, reducing the risk of legal troubles and financial penalties.
Protecting Finances: Your company’s financial health is paramount. Internal audits meticulously review financial records, safeguarding against errors and fraud.
Optimizing Operations: Efficiency is the key to success. Audits look closely at internal processes, offering insights to enhance operations, cut costs, and boost performance.
You can understand why those four concepts are critical to a successful and sustainable business, but what about the how? Naturally, the larger your business, the more complex your audit will be, but all audits follow the same format: Define the scope, gather pertinent information, document findings, and then remedy where needed. Remember, internal audits are not a one-time event but a continuous process to ensure the ongoing health and success of your business. Regular reviews and improvements based on audit findings will contribute to your organization’s overall resilience and efficiency.
Business owners often consider Tax Time as their annual internal audit and forget about it for the rest of the year. We do not recommend this practice as internal audits cover much more than just taxes. At Moose Creek Bookkeeping we continuously see the benefits of regular audits. Our clients who perform them regularly have a much smoother bookkeeping experience overall. If you are wondering where to start, please reach out, we are happy to guide you through what we feel is a great start to your auditing adventures.
With over two decades of combined experience, we bring knowledge, tailored solutions, and a commitment to your business’s success; we thrive when you thrive. Call any time to book a discovery call.