Businesspeople need to follow a wide range of legal regulations. If they fail to comply with them, they might face serious financial penalties or even bring their business to a closedown. In line with that, external audits are conducted by legal or financial authorities entitled by the government, to inspect whether or not a business works in accordance with official rules. However, those inspections aren’t meant to contribute to better work productivity. In order to boost your business output, you should perform regular in-house audits.
Set the audit goals
Performing an internal audit without clear goals is a waste of resources. Since auditors for that cause will be recruited from your in-house staff, you need to take into account the number of work hours they’ll be absent from their work places. Therefore, the audit should be meticulously planned. Firstly, decide what the auditors should focus on. For instance, inspecting the amount of used paper for printing purposes is a practical goal that will reduce your expenses.
Secondly, determine what actions they will take in case they discover serious nonconformance. Finally, prepare to bring some additional rules that will prevent your employees from any further breach of your business regulations.
Announce the audit hours
When it comes to the atmosphere during the audit, it shouldn’t introduce the state of emergency in your business affairs. On the contrary, your employees should be informed in advance that their department is going to be scrutinized by a special team of internal auditors. What’s more, the audit schedule should be placed on the notice board. It will ensure that everybody finds out about the audit hours on time.
As opposed to that, if your staff perceives the audit as some kind of a sudden raid, it will trigger unnecessary stress, which needs to be avoided. Since workers under pressure make more mistakes, it could harm your business in the long term. For all these reasons, keep the audit as transparent as possible and do your best to make it less stressful for your workers.
Educate the auditors
The main advantage of an internal audit is that you don’t have to pay for any additional financial experts. However, the drawback is that your employees need proper training before they start auditing. This issue can be approached in several ways. For starters, if you have any experience with that process, you can create a checklist containing the most important points the auditors should pay attention to. Naturally, you should include in this list all the features that play an important role for you in managing your business.
Nevertheless, if you’ve never done anything similar, the most convenient way is to turn to a professional auditor and ask them to train your employees. While this option requires investing additional assets, it’s the fastest way to get educated in-house auditors.
Improve your cash policy
When a business owner or manager doesn’t take proper care of their finances, it’s hard for that venture to thrive. For instance, if you keep getting a lot of new projects and tasks, but the income doesn’t grow proportionally, there must be some cracks in your business organization that leak assets. Apart from that, companies sometimes take borrowings with high interest rates because they don’t qualify for affordable loans. After a while, it’s important to analyze how those measures have affected your business. Similarly, if your credit rating used to be low and you decided to improve it with bad credit loans, conducting an internal audit can help you check whether or not this measure has helped your financial affairs.
Establishing proper internal control of your business affairs will ensure better financial discipline and work output. What’s more, you’ll also get a thorough insight into the results of different teams within your enterprise. Finally, an internal audit will provide you with the information crucial for the balanced development of all the departments and employees working under your roof.
Dan Radak is a marketing professional with ten years of experience. He is a coauthor on several websites and regular contributor to BizzMark Blog. Currently, he is working with a number of companies in the field of digital marketing, closely collaborating with a couple of e-commerce companies.