While quarterly and annual financial audits can be essential (and often required by law) to ensure that your financial resources are properly managed, the auditing process can turn into a real nightmare if you are not suitably prepared. Obtain the right resources and create a more sophisticated and accurate accounting process to help keep your financials ready for audit, no matter what the future holds.
Automated accounting and bookkeeping efforts offer many advantages:
- Fast and accurate data entry and calculations
- A streamlined accounting process for greater efficiency
- The means to track, map and diagram transactions and cash-flow across multiple documents and platforms
- Reduced risk of human error and resulting financial issues
- Superior organization and consolidation that ensure faster and more efficient internal and external audits
An outdated bookkeeping process costs your business more than you might realize. Software, applications and services that improve efficiency and accuracy streamline the entire accounting process, making it far easier to manage your financial assets and to ensure your information is always audit ready.
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Tip #1 Organizing Your Financials for Audit
Map your finances so that they can be traced from various statements through your general ledger and across supporting documents. This step is absolutely necessary when preparing for an audit.
By establishing a clear trail of all transactions and maintaining a level of organization suitable for the creation of accounting reports and accurate reconciliation efforts, businesses ensure that auditors can more easily assess their accounting processes. Effective organization of the detailed records that cover all of your financial transactions and activity is of paramount importance.
While simple in theory, organizing your records and financial information can prove to be quite a challenge, especially for businesses that utilize an outdated bookkeeping or accounting process.
Attempting to trace financial information through a poorly organized accounting system can quickly bottleneck the audit process that may leave auditors in the lurch, wasting countless hours attempting to make sense of even the most mundane details and accounting issues. Resources that will allow you to automate the accounting process can greatly simplify your efforts to organize and manage past records.
The superior organization made possible through automated accounting and bookkeeping can be crucial for ensuring that both internal and external auditors are able to do their jobs with greater ease and success.
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Tip #2: Automate Consolidations to Improve Accuracy
Managing and tracking funds across multiple departments can create a greater risk of errors and misstatements simply due to the complexity involved in the accounting process. Outdated methods for keeping financial records makes consolidating information far more difficult, especially for larger businesses and those that have high-volume intercompany transactions, multiple assets and accounts or that employ multiple methods and platforms in order to track financial activities.
Accounting efforts that rely on a complex large-scale spreadsheet or workbook can make identifying and addressing errors very difficult, which can in turn leave auditors at a loss as to how to untangle and properly document past entries and activity.
By automating the financial consolidation process, it becomes possible to create an accounting system that benefits from improved accuracy. Software and applications that can automatically manage multiple accounts, provide quick and accurate currency conversions and ensure that your financial records are effectively organized and properly consolidated can make a world of difference.
Automation allows your business to avoid the human errors that so frequently become an issue when dealing with high-volume data or multiple calculations, and helps you mitigate many of the risks associated with material and financial mismanagement.
Trending: [Free Download] Making Your Financials Ready for Audits
Tip #3: Find The Right Accounting Software for Streamline Operations
The right financial and accounting software streamlines the day-to-day accounting process and helps to ensure that your records and information are ready for quarterly and annual closing and audits.
Automated accounting processes reduce the risk of errors commonly caused during manual calculations and spreadsheet entry, allowing for faster and more reliable calculations that reduce the time and effort needed to perform either a scheduled or surprise audit.
Assessing your financial situation accurately often requires an auditor to trace all transactions through the wide variety of documents, spreadsheets and records that may be used throughout your business. Purpose-built automated accounting systems offer an easier way to manage data, define and map the accounting path of specific transactions and ensure that all of your financials will be ready for audit.