If your new company is proving successful and experiencing rapid growth every month, consider doing an external audit.
You might think this is just something you have to do at the end of each year, but it's not.
The truth is, an audit at this stage of your business life can help you find any problems in your business. Problems you can then fix before they turn into major issues.
You'll also gain these seven other benefits...
Do an external audit on your growing company and you'll reap these seven benefits
Your auditor is there to not just report on the financial statements. He's also there to:
- Check your internal controls,
- Address areas of your business that are high risk, or
- Comment on areas of your business that you could improve on.
Finding the right auditor for your business is important. It can be just as important as finding the right CEO. The benefit is, you have a qualified person looking at your business from the outside. He can help you spot risk-areas before they turn into major problem. And in new companies, there are often a lot of these risk areas;
If you're looking for financing from a bank, or already use outside finance to have your financial statements audited. This way, you can easily prove your finances are in order;
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If your company has shareholders who aren't directors, an audit will assure them that your financials are true, accurate and in good condition;
If you're looking for new investors to invest in the company, audited financial statements will be a big selling point. This will help you show potential investors exactly what your finances are like;
If you're looking to sell all or part of the business, it's easier with audited financial statements. Again, this shows someone who wants to buy into the business that they're investing in a company with healthy finances;
An audit will provide an early warning of any incorrect accounting and how it affects your tax liability. This is a huge bonus if SARS audits your company and find errors. It will also give you a chance to fix those problems and make your business SARS-proof; and
This will help you if you're in a growth phase. Especially if your need internal controls for future planning. The benefits of an outside expert looking at your business are immeasurable.
When you start your business, it's easy for financial errors to creep in. These could land you in big trouble with investors, shareholders or SARS. An external audit can help you avoid all these problems.
To find out more about doing an external audit on your company, check out the Practical Accountancy Loose Leaf Service.