As part of this process, you may well be considering whether to stay with manual audits or whether to swap to automated audits.
Investors, shareholders, government agencies, and numerous other people will want to know your company is legitimate and that it does what it claims to do. They may also wish to trace how you spend your money and that your turnover is what you say it is. An audit ensures your financial statements are accurate and proves that your company is spending money legally.
Keeping clear and accurate records is critical for any company, big or small. Failure to do this can look highly unprofessional but more importantly, it will lead to legal and compliance issues. Put simply, if your records aren't accurate and up to date, you're likely to wind up in a lot of hot water. You may even face business closure, accusations of fraud, and prosecution, depending on the situation. In the UK, a wide range of companies must provide an audit. This can be found on the UK government website.
As so much rides on accuracy, audit time can be very stressful for a business, especially if discrepancies are found or inaccuracies are highlighted during the process. Most business owners are aware of that sinking feeling they get when an audit throws up a nasty surprise or two. However, it doesn't have to be this way. If transaction data is captured at source automatically, you can be prepared for an audit at any time and most of the stress is lifted away.
Manual audits
An audit trail will include numerous documents: receipts, invoices, change logs, and recorded transaction approval. It lists who made changes to things, when and why. As such, you need to keep a clear record of these things too. All documents must be easily authenticated and clearly legible. Time stamps, clear transaction details, records of any changes to the document, and details of who first approved the transaction will all help to ensure that the document will be considered acceptable. In a manual system, this must all be created and monitored by you and your accounts team.
Automated audits
How we do business is forever changing. We now pay online, via card, via bank transfer, and even via online financial systems. We pay in multiple currencies and send money to numerous countries with ease. All this leads to more paperwork and more complex transactions. Managing these manually can become a real headache, even for the best of accounts departments. Inevitably, as things become harder, more inaccuracies begin to occur when we rely on human beings.
Audit trails mostly focus on money coming into the company and money going out on purchases, etc. To automate the audit trail, you need a software solution like Xelix that digitalises the documents associated with these payments and that highlights essential transaction details. Once you have taught your staff to upload documents and receipts as they go along, this can often halve your workload almost instantly. No more chasing people for their documents or trying to find out that receipt from inside your car!
Also, in some software solutions, payments can be authorised via the software itself, centralising all information and making everything so much easier to find.
As such, for an efficient and accurate way to conduct your audit, automation is always your best option.
