To reduce your audit bill, do these four year-end adjustments and reversals on your finances before your auditors arrive
It's that time of year again, when auditors are about to descend on your company. Maybe you're in a panic trying to get everything ready. But did you know, there are elements of the audit you can do yourself to reduce your bill?
The auditor's job is to assess the 'fairness' of your financial statements. To do this, they will inspect your documentation and records that make up your financials.
They want to know that your records represent what actually happened during the year and that all your adjustments and figures are a true reflection of the value of your assets and liabilities.
To save time on this process and, therefore, save on your audit bill, do these four year-end adjustments and reversals on your finances yourself...
Four year end adjustments and reversals you should to save audit time and money
1.Accruals for fixed monthly expenses
These are the expenses you pay every month. Your financial statements should have 12 months of these payments, but in most cases, you won't have made the last month's payment.
2.Accruals for other expenses
There are certain costs that you only get the bill for later. This means that at month-end, you may not know the amount of the expense yet. It's generally a good idea to wait for a week or two before you roll over to the new financial year so you can record these amounts correctly.
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This is a non-cash entry and for this reason, you might neglect it. Calculating this before the auditors start their assignment will save them from having to spend time verifying the value of your assets and then calculating the depreciation for you.
If your business involves inventory (i.e. manufacturing or retail rather than services), you need to control the movement of it in your company. The only time you want goods leaving the premises is for a valid sale.
Do these four adjustments and reversals on your finances so you don't land up with a massive audit bill.
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