Four Steps to Being Prepared For Your Annual Financial Audit

Your annual financial audit gives you the opportunity to ensure that your finances and books are in order and accurate. This gives you a better grasp on how your company is performing and if any changes need to be made for the next fiscal year.

Before you even think about having the auditor or CPA arrive, look at your tracking and procedures. The earlier you get a start on correctly managing your business, the easier it will be when the auditor comes.

  1. Make sure your financial data is balanced

Make sure to reconcile all your accounts to the general ledger including your accounts receivable, accounts payable, and bank accounts. Balance your books and make sure your accounting and reporting are on the same page.

  1. Don’t forget about month end

During month-end close processes, you’ll be able to identify any discrepancies in expenses or income. Make sure to have more than one person look over each month’s financial statements and keep a strong audit trail.

  1. Track your fixed assets.

It’s important to have a record of your fixed assets along with the taxes and services that went into their purchase. If your assets are checked out to employees, jobs, customer or vendors, or move between locations it is important that you track the physical location of the items as well. Fixed asset management can help you:

  • Calculate depreciation
  • Create and use asset groups to make maintaining asset records easier
  • Transfer an asset to a new GL account or property tax location
  • Retire an asset, partially retire an asset, or retire a group of assets

 

  1. Consider going paperless

Going paperless not only is environmentally friendly but saves you time and money. You no longer have to spend time filing copies of checks, invoices, and statements. All of that information is saved electronically and is accessible with a quick and simple search. No more rummaging through stacks of paperwork trying to find a specific invoice.

 

The goal of a financial audit is to receive an unbiased opinion as to the financial state of your company. If you prepare throughout the year and have a plan for clean financial data and a secure audit trail, you’re setting yourself up for a successful audit.

If you’re nervous that your financial data isn’t accurate or you need help keeping up with your books, contact the accounting professionals at 360 Virtual Accounting. They can help you get a better grasp on your finances and get back to managing and growing your business. Learn more about bookkeeping services here. 

 

By Sabrina Zimara

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