Performing an annual self-audit or internal audit on your startup helps to streamline accounting and operational procedures while finding and cutting unnecessary expenditures. Making strong decisions in allocating your company’s capital and the internal processes you use to run the company can help you on your path to success. Internal audits evaluate those processes as objectively as possible to find areas of improvement.
How does a self-audit work?
In a self-audit, an internal auditor looks at your procedures to assess risks and look for potential problems in the way you run your business. The auditor might uncover areas where you’re out of compliance, using inefficient procedures, or engaging in fraud or incorrect bookkeeping practices. The internal auditor can also recommend areas where you can improve your operations for greater efficiency and increased profits.
Accounting and financial aspects are often a big part of internal auditing, but an internal audit can also focus on other areas, such as the efficiency of your manufacturing process or the effectiveness of your small business security. If you’re concerned about fraud or internal theft, you might use an audit to determine if you’re correct in your suspicions.
If you’re not ready to hire an internal auditor, you can handle your own internal auditing. For example, you might hold a periodic financial review with your accountant or bookkeepers. When they close out the books each month, ask to review the financial statements with them and inquire about line items that are increasing or more costly than you imagined. You can also use a variety of internal audit apps to make the job easier as you focus on issues such as finances, environmental risk, compliance, and risk assessment.
Performing a self-audit lets you take a deeper look at what’s happening with your business. It’s an effective way to evaluate your processes and make changes that can increase your productivity and revenue. When you use cloud-based accounting software such as QuickBooks Online, you can take a closer look at your finances from wherever you are. 5.6 million customers use QuickBooks. Join them today to help your business thrive for free.