Could An Audit Help Your Small Business_

1. Could An Audit Help Your Small Business?

2. For many small business owners, the thoughtof an audit might induce a state of fear and panic, but they aren’t automatically a bad thing. In some instances, audits can act as a routine maintenance check-up, and not as something that will invite penalties from the IRS. What is an audit? Through systematic reviewing of a business’stransactions, its financial records are examined during an audit to determine whether they are correct. Routine audits are carried out by many businesses every year. It is the role of the business owner to maintain proper accounting books that give an accurate representation of both its income and expenses, and if anything is missing or untoward, an audit will likely be a prolonged one.

3. What are the different types of audits? While for many, IRS audits automatically come to mind, a business can actually have other types of audits, too, including ones that are internal or external. Let’s look at these in a little more detail: Internal audits ● Initiated by the business itself and carried out by someone employed within the business, internal audits can help put a stop to financial mistakes and give a heads up on a company’s goals. But they can also examine the way in which a business operates and how it is managed, to ensure that everything is functioning properly.

4. For businesses with shareholders or board members, an internal audit might be carried out to give them an update on its finances. External audits ● Carried out by a third party, such as the IRS or an insurance company, external auditors are bound to comply with a strict set of standards for auditing, known as ‘generally accepted auditing standards,’ or GAAS. It may be that those auditors scrutinize a business’s financial records as a whole, or they may focus in on certain aspects of a company’s operations.

5. IRS audits ● If a discrepancy was detected when a small business tax return was filed, an IRS audit may be triggered, or in some instances, it might be chosen for one randomly. If your small business is being audited by the IRS, you’ll receive written notification in the mail, and it’s always best to seek help from an experienced tax professional as soon as you receive this.

6. How to prepare for an audit It’s imperative that in advance of an audit being carried out, businesses get their financial records up together and organized. The best way of ensuring that you’re not left scrabbling around and panicking at the last minute when notice of an audit arrives, is to consistently maintain up-to-date and accurate records. Auditors should be given easy access to all financial records, such as receipts and invoices, bank and credit card statements and journal entries, to give them a clear view of the business.

7. How can an audit be helpful for a small business? Audits can help businesses identify any existing, or potential problems, such as mistakes in numbers, which can help you make better informed decisions and prevent a small problem from becoming a bigger, costly one. Over the long term, an audit can actually help your small business stay on track and give your bottom line a bit of a boost.

8. Additionally, audits can provide business owners with the motivation they need to put new and improved accounting processes in place. By choosing to embrace an audit, whether internal or external,your small business could improve its processes and become more profitable. Just be sure to seek professional guidance when appropriate, such as in the event of an IRS audit.

9. At Heyer Inc, we proactively assist our individual and small business clients in meeting their goals. Our key area of focus is ensuring that our clients remain compliant with federal and state tax laws by providing them with high quality accounting and tax services Miami. If you are looking for an individual accountant in Miami, heyer inc would be a right option.