How to make your Annual Audit work for youBy Paul Levy, Lawrence Grant
A question that most companies find themselves asking is, is my annual audit adding value to my business? We understand perfectly that an audit of your business records can sometimes be time consuming, costly and inconvenient, but we look at it as an opportunity to conduct a review of your financial and management systems, identify any problem areas so that we can help transform your business' prospects for the future.
Allowing plenty of time to plan ahead for your audit can help reduce the amount of time spent on it, and it also allows an excellent opportunity for us to talk to you about your business, and make some recommendations going forward.
Reducing the cost of your audit:
- Reconcile PAYE and VAT account balances with amounts due to Her Majesty's Revenue and Customs.
- Reconcile your bank analysis book with your bank statements
- File your invoices and correspondence in order
- List your year end creditors and agree with your Purchase Ledger Control Account.
- Record and analyse all your cash and bank transactions
- List your fixed asset additions and disposals
- List your year end debtors and agree with your Sales Ledger Control Account.
- All your recorded expenses are authorised and valid.
- All your recorded debts are recoverable.
- All income is recorded and banked promptly.
- All your liabilities are identified and recorded when they are incurred.
Designate a member of staff as the primary contact to fulfil supplementary documentation requests and answer any questions.
Do your records give you enough information to make key management decisions? As a guide to help you, you should know the following:
- What return you are obtaining from your investment in the business?
- Whether you will be able to meet your liabilities as and when they fall due.
- The extent to which you could attract or increase outside finance.
- Your fast and slow moving stock lines.
- The levels of gross profit from your product lines.
- The extent to which additional working capital will be required to finance an expansion of your business.