For the majority of small business owners, the term ‘internal’ or ‘self’ audit is hardly an inspiring one. When we think of audits, we tend to think of something only huge corporations do, something associated with accountants or comparing different quotes from auditing companies on review sites (ConsumerReports.com, Bestiews.com, etc). But the truth is, performing an audit yourself doesn’t need to be complicated or intimidating, and they’re a remarkably helpful tool for companies of any size, even small businesses.
Contrary to widespread belief, an internal audit can be performed quite easily, and without any exorbitant costs. Plus, when it’s over you’ll have a clearer understanding of the way your business operates. If you’ve been recording a loss, an internal audit can help identify problems hurting your bottom line or profit margins. But even if business has been booming, at the very least it’s going to alert you to any red flags that might trigger an official audit.
You don’t need to hire someone, or outsource the task; It’s as simple as sitting down with employees and collecting all the relevant information. Then once you have the data, create a timeline. Map every important event that took place in each department – meetings, key e-mails, proposal deliveries, new contracts, even your online presence! When you’re looking at auditing, you shouldn’t leave anything out. Make sure you’re recording everything that is relevant to the business.
One of the most important things you can do is keep written reports. Ensure they outline not just key issues, but also the plan for dealing with them. This information can be a huge help when it comes to determining what is working for your business and what isn’t. The entire point of an internal audit is to acknowledge problems, and correct them.
I was once assigned to audit a Dutch verhuislift huren (Dutch for “rent-a-lift” company) where the environment for businesses is highly regulated. Because Dutch Law requires companies of all sizes to perform an annual audit, the company had spent time before I arrived on the scene, preparing their own reports, balance sheets and information about employee numbers and turnover. The resulting audit was a breeze thanks to the internal work they had already done.
An audit can be tedious, especially if you haven’t been keeping accurate records. E-mail communications, proposal revisions, social media initiatives, charity donations, pricing changes, contracts… there are very few documents that you won’t want to keep some record of. If record-keeping hasn’t been your forte, then there is legitimate value to be found in going through the exercise of an internal audit to help you get your information management processes up to scratch.
When you take on the task of performing a self-audit, your main priorities should be establishing an understanding of day to day processes and methods in the business, and recommending improvements to be implemented. But when is the right time? Trick question! There is never a wrong time! Auditing internally is one of the best ways to help your business succeed and grow!
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