Efficient Record Keeping Strategies to make sure Smooth Audits

by Lima Dutta Accounting services

Take any process. You’ll find that efficiency most frequently results from investments of your time and organization. An equivalent theory applies to accounting functions also.

Audits are an accounting function where financial statements are examined to verify information. A attestation service determines whether the knowledge contained within financial statements is reliable and accurate.

An audit is critical because it represents the idea of confidence invested within the company by its shareholders. A budget is usually referenced to assess the ‘health’ of a corporation, and an audited statement can significantly enhance an Bookkeeping Services in Columbus.

How are you able to ensure greater accuracy in your audits? Below are some ways during which you'll improve your record-keeping methods to make sure smoother audits:

Records needed

Maintaining effective records requires that you simply have a transparent understanding of the type of records you would like to stay , and this is often dependent upon the sort of business that you simply operate. Some businesses must maintain property and real-estate related records while others must track purchases of other assets, like machines or vehicles used for your business. Generally, the sorts of records needed include:

Gross receipts for income received as results of your business. Examples include receipt books, MasterCard slips, invoices, Form 1099-MISC, etc.

Documents supporting purchases you've got made for your business, particularly if your business includes procuring or purchasing staple and converting it into finished goods for your clients.

Records of employment are equally important. As employers, you'll get to preserve employment records for four years, as a part of good record-keeping practices.

Why keep records?

Records assist in:

Consistent business monitoring

Keep track of triggers which will impact the progress of your business. This will include documents which can indicate areas of potential sales growth.

Accurate financial reporting

The importance of this can't be overestimated. Make sure to take care of error free income statements and accurate balance sheets. These represent the way during which you manage your business and relationships together with your creditors or lending institutions, like banks.

Maintaining receipts

Compile and organize your receipts carefully. Most businesses receive payments or income from multiple sources. It’s critical that you simply track these sources and segregate your taxable and non-taxable income. Your bank statements should be reconciled regularly, while your investment records should be organized to reflect any taxable income.

Maintaining organized receipts assist in facilitating smooth audits, any they also assist you accurately track of expenses and income.

Review reports periodically

Review your accounting and financial statements periodically to see for accuracy. Periodic reviews allow you to notice mistakes in their initial stages and avoid having them snowball into larger issues.

Additionally, reviewing reports periodically ensures you're tracking expenses and costs. If at any stage you uncover an expense discrepancy, it is often addressed immediately. Discovering discrepancies which could are easily resolved at the eleventh hour only points towards poor report management and may create problems during an audit.

Consolidate reports and data

Most data is voluminous and substantial. Rather than manually pouring over multiple, diverse entries and worksheets, which may end in unnoticed errors, consolidate related data during a single place.

A single source also will assist you in knowing exactly where to seem for specific information.

Again, consolidation is simpler once you review your records regularly. Small unit of knowledge is simpler to consolidate than larger chunks, which makes regular review and consolidation more meaningful. Invest in automation, if it helps your Online Accounting Services in Columbus. If executed by the proper vendors, automating your accounting systems can assist you reduce actual errors while allowing you to process more data during a shorter period of your time.