Internal Financial Audits

Internal Financial Audits

Companies in Charlotte perform annual internal financial audits to get an overview of where the money is coming from and going to along with making sure everything is in compliance. It’s a good business practice that gives an overview of the financial health of the company. It’s because discrepancies are uncovered, money is accounted for, and the necessary filings are checked for validity. While a financial person inside the company can do the work, the job is done best with an outside auditor.  A Charlotte, NC, business accountant can take on the role of the auditor and perform all the necessary tasks to create a final report that shows the financial health of a company with internal financial audits.

Why Perform Internal Financial Audits?

The business handles money every day and it’s easy to lose track of expenditures if there are multiple people buying needed supplies for the company. Sometimes these expenditures can go on for months without someone noticing. Until that is, a hole in the budget shows up and no one knows why.

Incoming money is typically handled under the accounts receivable column in the spreadsheet, but human errors happen. A customer makes a direct deposit into an account and someone fails to make a note. The bank balance is out of whack as a result and no one can figure out why. An issue like this can go uninvestigated because the balance is in the positive and no one’s concerned because of that fact.

North Carolina and local municipalities like Concord, NC, require most businesses to get licenses and permits to operate. Those permits typically expire every year or in a periodic cycle. While it’s not a major deal if a license expires and isn’t renewed for a couple of days, it is a major problem if it’s left to go unchecked for weeks and months.

When does your businesses financial year end?

How a CPA Helps With the Internal Financial Audit

Businesses have only so many hours in a day to handle everything that needs to be dealt with. Taking one person offline and putting them onto the job of doing an internal financial audit can cause other issues to pile up. Bringing in a CPA to take care of the books allows the business to operate as normal apart from supplying the information she needs to perform her role.

A Charlotte, NC, business accountant goes through all of the available financial information, reconcile bank statements with internal balance sheets, look through the licenses and permits for compliance, and makes sure that all federal paperwork is properly filed. If she finds something that needs immediate attention from the principles of the business, she’ll make sure it’s seen and taken care of.

Businesses Benefit From an Internal Financial Audit Led by a CPA

A CPA has intimate knowledge with how the financial side of a business needs to run for optimal efficiency. She knows where to look for discrepancies, checks tax returns for unreported liabilities or overpayment, and helps find where money has been going to. All of this information can be used as an operational roadmap for the upcoming year.

The overall goal of an internal financial audit is to find inefficiencies and address them. Some things can be left alone because they’re either already efficient or there’s no good solution for them. But inefficiencies are addressable and result in the business saving money over time. An audit brings about awareness of where money is coming from and where it’s being spent. Getting issues under control may create upheaval in the beginning, but becomes a standard operating practice in time, and results in more money staying in the business instead of flowing out.

And perhaps what’s best about internal financial audits is that it benefits businesses of all sizes. A CPA can be an invaluable ally in helping an operation generate more income and operate smoothly going forward.

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