Just like a tax audit, a financial audit can put enormous stress on business owners. Verifying your business’ financial status with a thorough audit of your accounting and reporting is a lengthy procedure and no stone is left unturned. If you are facing a financial audit for a business loan, you want to be prepared. There are ways to make this process more streamlined and less stressful with some planning and preparation.
4 Ways to Prepare for Your Audit
To save time and money, the best option is to have your financial information ready for your CPA in an organized and detailed manner. If all the documents and information are easy to obtain, the process can go much quicker, cutting down on investigative issues during the audit. Here are four ways you can prepare for your audit to help it go as smoothly as possible.
Reconcile bank accounts monthly.
If you do not already, make sure you are reconciling your bank accounts monthly. This can ensure you are documenting all expenses and revenues, making them easier to confirm during your audit.
Collect documents and schedules needed.
There will be documents and schedules that your audit CPA will need during the audit. Save these all to one digital location to make it easy for them to find and access, saving time throughout the audit process.
Reconcile all other accounts.
Most importantly, make sure all your cash, accounts receivable, expenses and inventory are all reconciled and up-to-date. Nothing will slow down an audit more than inaccurate accounts on the basic level.
Complete your checklist.
Before your audit, you will receive a checklist of the items that will be needed for completion. Do not wait to collect this documentation and information. Having it ready to go will make the audit go faster, which can save you money and reduce the stress of the process for you and your CPA.