Auditing Your Small Business and Its Gains — by Bassey Daniel

Auditing your business should be an integral part of your business activities. Before becoming a business consultant, I worked with several financial institutions in various capacities and I must say accountability and due diligence are part of the hallmark of a successful financial institution.

Many banks and financial institutions that are still standing today owe it largely to their willingness to establish processes that subject their procedures and practices to serious scrutiny before they catch the eye of the regulatory bodies.

These financial institutions simply contract private external auditors who have no bias against or in favor of the organization under scrutiny.

But most times, it is important that the auditor is very familiar with the regulations of the government and is unbiased.

The Misconception of Auditing

You need to understand that the primary reason for auditing your business is not to detect fraud or any corrupt practices, although this may happen when the exercise takes place.

This is why Auditors are labeled watchdogs.

The whole idea of auditing is to help create an extensive and fair picture of the overall condition of a particular business without overlooking any areas.

Before I move on to remind you about the advantages of employing an external auditor, it is important to note that no business is too small to be audited externally.

You can always get an external auditor as a friend or relative who is interested in making sure you do not accrue loss in your business.

Auditing Your Small Business is Good

The audit of your small business should be a positive experience and not one to be feared; it is an opportunity to receive feedback on strengths and weaknesses in systems.

Apart from getting robust feedback from your auditor, it is also important to have a detailed discussion together as regards ways of improving your financial and operational systems and procedures.

In my subsequent posts, I will take my time to give you some tips on how to use the auditor’s feedback to your advantage.

Auditing your small business may be likened to a weapon, but this weapon is for you and not against you.

When auditing is carried out, it should help you destroy any element that is against the growth of your business.

Auditing For Small Businesses

I am streamlining this article to small business owners only.

Big business owners already have the means to hire high-end external auditors but small business owners need to make it a culture more than an exercise.

If you do, you will no longer see external auditing as stressful because it takes so much investigation and it is scary because it exposes major flaws and discrepancies that you may be hiding from.

Every small business needs to cultivate the culture of auditing and I can help your business develop an auditing system that will not strain your business. Reach out to me if you are interested.

In this article, I want to use my wealth of experience in the financial sector to give you a brief rundown of the reasons you need the help of an external eye especially when it comes to the financial aspect of your business;

Auditing is Cheaper Than You Think

If you are a business owner in this modern era, it means you must have a friend who is working in the banking and/or financial sector.

If you don’t have a friend, you should have a relative or a younger friend studying any financial related courses that you can recruit to help you check your books for a fee that is not too high for you or too low for them.

On a funny note, women are more thorough with these kinds of activities

The advantage of this arrangement is that you will get the job done without straining your finances and you can increase the expertise as you scale up your business.

Auditing helps you form a responsible spending pattern.

If you want to cultivate a responsible spending pattern, you need an unbiased auditing culture that will give you a series of reports that would give you the intelligence you need to plan.

I have heard many people play down the importance of auditing.

This set of people will pay for auditing in the future because they don’t understand the importance of data in planning towards having a successful and sustainable business.

You Can Be Your Own Auditor

In my last blog, I mentioned that you need to be personal with your business vision and I made a disclaimer that it does not apply to the daily operations of your business.

Therefore, being your auditor is an example of my disclaimer.

If you want to be a re sponsible entrepreneur, you need to make some hard choices of being your auditor from time to time.

This will help you cultivate a culture of accountability in the long run.

Auditing Helps You Escape The Owner’s trap

Some small business owners are like bad parents because like bad parents, they fail to question and address the bad behaviours of their child accordingly.

And just like any disciplined parent would do, a responsible business owner would do what is necessary to make sure the business measures up to the envisioned standard.

Like a normal parent would do, the responsible entrepreneur would take ownership of the business but unlike an irresponsible parent, s/he would take the responsibility of administering measures needed to correct any discrepancies in the business.

This is the discipline that comes with cultivating an auditing culture.

Auditing Your Small Business Reveals Your Blindside

The purpose of auditing is to provide a true and fair picture of your business finances and operations; and that the use of funds is according to your vision as outlined in the plan.

You cannot do this if you are too entrenched in the daily activities of your business.

When you are in the middle of an activity, you tend to ignore or overlook some benign cues and clues that may do damage to your business when they are left for a very long time.

In the end and with the right mindset, you will see that auditing is an important tool for your business and it is not as complicated or dangerous as people make it sound.

If you want to work on your business and not just work in it, you need to take auditing seriously.

Auditing Your Small Business and Its Gains

Originally published at https://basseydaniel.com on September 7, 2020.