This article was written by one of our partners: Evenstone, specialists in accounting and bookkeeping for ecommerce businesses.
Being audited can be a time consuming and expensive undertaking, and most businesses only do it when they are required to by external parties.
In the UK, a private company only requires an audit when it meets all three of the following criteria, or if the shareholders specifically ask for an audit to be carried out:
Turnover is greater than £10.2m
Assets are greater than £5.1m
Average number of employees is greater than 50
In the US, only public companies require an audit. But banks or other lenders may ask for one to be carried out for other businesses as part of their lending requirements.
If you do need to have an audit, how do you make it as pain-free as possible?
Best practices for your audit process
The key is to do as much preparation as you can. Here is our list of things to think about to make the experience as easy as possible.
1. Ask your auditor well in advance for the information that will be required.
If you have had an audit before, check back to see what you had to supply last time. Ask the auditor if they have templates to make sure the information is presented in the required format.
2. Check which employees will be required for the audit.
Make sure they are available on the audit dates and that they know what is expected of them. Try to arrange for the audit to be done at a quiet time of year if possible.