Small business statistics certainly make for interesting reading in the UK, with SMEs accounting for an estimated 99.3% of all private sector firms. These companies also account for 60% of all private sector employment in the UK, establishing the small business market as being central to the modern economy.
This is why small business-owners and entrepreneurs must strive hard to protect their ventures in 2018, by adopting a proactive and intuitive outlook that can drive organic growth.
Performing regular audits is crucial to this, as this type of internal investigation can deliver a number of benefits to your venture. These include:
1. Highlight overspend and inefficiencies
One of the primary benefits of internal auditing is that it highlights potential inefficiencies, both within your core operations and existing financial reporting processes.
This is particularly important when dealing with recurring processes or payments, as inaccuracies or instances of overspending can have a cumulative impact on your business.
By identifying issues or oversights ahead of time, you can instantly reduce costs and secure long-term savings for your business.
2. Prepare for Corporate Tax Audits
Depending on the structure of your business and its earnings, you’ll be required to meet a fixed tax liability every year.
Make no mistake; your firm could well be audited at the end of each financial year, so it’s crucial that you repay the precise amount required and comply with the latest legislation and reporting guidelines.
This is why smart entrepreneurs employ the services of companies such as RSM to perform objective internal audits on behalf of their business, as this ensures compliance and that your financial reporting is entirely up-to-date in instances where you’re contacted directly by HMRC.
3. Organise your company budget more efficiently
We’ve already talked about the fact that internal audits enable entrepreneurs to identify inefficiencies in their business, which can in turn translate into significant savings (both in terms of time and money).
However, internal auditing can also provide an in-depth insight into your investment capital into your business, including strategic disciplines such as sales, marketing and customer service. This information can then be reviewed by key stakeholders in the business, in order to determine whether or not your annual budget is being fully utilised.
Most importantly, internal auditing allows you to create an agile spending plan that can adapt to changing commercial circumstances, which is crucial in an increasingly evolutionary and technology-driven marketplace.
Without this, you run the risk of spending your money inefficiently while also missing out on key opportunities for future growth.