Why do SMEs need Regular Auditing?

Mon, Nov 20, 2017

Featured Post, Financial Advice

Many small businesses are currently locked in a state of turmoil. In the UK, SMEs are having a sizeable dip in confidence even on the precipice of the Christmas rush, causing a stagnation in consumer spending and commercial investments. This is owed to household inflation, causing shops to dry up with customers. Consequently, many businesses are hoarding their cash and parting with it only when completely necessary, cautions dramatically raised as congestion sweeps any and all markets.

However, while some SMEs gladly dodge annual audits all together, others might well be thankful to have their finances checked in such circumstances. In times of crisis, it does well to check, double check and triple check all facets of a business, and the finances are high up on the priority list.

It is vital SMEs get ahead of the curve. Here are some ways that regular auditing benefits the SME.

Identifying Wasted Resources

An SME, while ambitious, undoubtedly has limited resources and capabilities. Every asset is key to survivability or the bigger plans for the future, and there’s not a single penny that can go amiss. It all counts for something, and all of it matters.

A regular audit can shine a handy spotlight on the finances of the business, and determine where all the money is going. Is there too much investment in certain areas? Is the company generating weak returns in another area? Is the small business financially viable? It’s all answerable and changeable through a regular audit, a maintenance check on the strength of the cashflow.

Saving Money, Saving Time?

Of course, it’s hardly an hour’s work rifling through company assets. It takes both time and dedication, pouring through fiscal details that can be stress inducing and mind boggling. Additionally, the idea and demand of doing this regularly naturally inspires further dread for some who might think they have to do it all themselves.

However, SME’s outsource it all to another company, providing some much needed backup that can get the job done smoothly and without hassle. In result, the likelihood of the SME missing a trick in their audit goes down exponentially, as no stone is left unturned. To top it all off, consultation is also offered, advising the SME on how move forward with best practices. If nothing else, this is at least provides a peace of mind, with professional accounts approving or advising every move the SME makes.

Dodging Fraud

When it comes to fraud, scams target the weak and unaware. Subsequently, the younger companies qualify for both categories at the start of their venture, and thus become more susceptible to deceptive schemes.

However, the audit can help protect an SME against fraud. By going through everything as if with a fine-tooth comb, bad deals, silly errors or absent details can all be traced and tracked down to point of origin. Whether it’s a genuine mistake or something more sinister, the books for real world transactions must be checked as well as the digital excel sheets. Ultimately, it’s all for the sake of legitimising a company’s history, ensuring everything that has transpired is fully fair and legal.

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