How to Conduct a Business Audit
Running your own business is incredibly rewarding. Each new day brings fresh opportunities as you meet with clients, chase your dreams, and confront challenges as they arise. One of the biggest challenges small business owners face is the constant need to evaluate, adapt and evolve.
Conducting a business audit gives you the information you need to tackle this challenge and secure ongoing success. It is a valuable opportunity to identify problems, evaluate performance, and plan for growth.
We understand that the process of carrying out an audit may feel daunting. So, we’ve put together a beginner’s guide that will hopefully give you the confidence you need to dive in and get started.
Plan and Prepare
Like anything in business, planning is critical to a successful audit. Take the time to gather all of the documents and information you will need to analyze your business. Organizing everything will make your life much easier during the auditing process.
Every business will be different, but here is a list of some standard documents to consider:
Bank statements
Invoices and sales receipts
Tax records and returns
Income statements
Accounting reports
Business policies and procedures
Legal documents
Industry-specific regulation requirements
Identified benchmarks and goals
Marketing and sales strategies
Get Down to Business
Once you have all the documentation ready and organized, it’s time to dive in. To avoid being overwhelmed by the process, try and tackle one area of your business at a time. In addition, as you move through each area, it can be helpful to create a list of specific tasks that need to be completed. Having a checklist will keep you on track and ensure you analyze your business thoroughly.
Consider Financial Operations
Conducting a business audit is a great way to develop a deeper understanding of your financial operations. Regardless of how small your business is, accurate financial management is crucial for success.
As you work through the relevant documents, consider the following:
Are your records stored digitally and backed up?
Is your accounting system accurate?
What are your current expenses?
Are your taxes up to date?
Have you created a profit and loss statement to track your bottom line?
While you don’t need a finance degree to analyze your operations, hiring a small business accountant to provide professional advice and guidance can be highly beneficial.
Check Compliance
Regulations surrounding operational policies and procedures are becoming increasingly complex. Therefore, it is essential to be aware of your legal obligations and ensure that you comply.
Legal requirements will vary depending on your situation and location, but here are a few common factors to consider:
Privacy and data storage
Tax legislation
General Accepted Accounting Principles (GAAP) Guidelines
Cyber security threats
Industry-specific certifications and regulations
Track Goal Progress
A business audit is a perfect opportunity to analyze and measure the progress of your goals. First, take a look at the benchmarks that you set. Are you on track to reach them? If not, where are you falling short?
While you are examining the progress of your goals, review your current marketing and sales strategies. Are you satisfied with the results you are achieving or do you need to explore other avenues for client acquisition and retention?
Identify Opportunities for Improvement
One of the most valuable benefits of conducting a business audit is the opportunity to discover areas for improvement. Taking a comprehensive and objective look at your business will help you to identify strengths and weaknesses and develop a plan for future growth.
Carefully examine the findings from your audit and brainstorm ideas on how you could improve your business.
Here’s a list of ideas to get you thinking:
Examine your expenses and identify potential cost savings
Look for ways to improve your efficiency and productivity
Explore the possibility of offering additional services or programs
Refine your marketing and sales strategies
Level up Your Business
There is no doubt that conducting a business audit can be challenging. But now that you’ve done the hard work, it’s time to bring the information together and implement the changes required to take your business to the next level.
Set new goals, explore opportunities, and enjoy watching your business grow!
Please remember that the information in this article is general in nature and does not take into account your specific objectives, financial situation, or needs. So, if you would like to know more about auditing your business, we recommend investing in professional financial advice from a small business accountant.
Whether you are a recent graduate or an established sleep consultant, Sweet Sleep Academy is here to support you. Check out our blog for more information on growing your business, and if you are interested in our mentorship program, you can find all the details here.
Contact us today, and let us help you on your journey to success.
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Why a Small Business Audit is a Must — Sweet Sleep Academy
