Why You Shouldn’t Fear An Audit.
Don’t Think Of It As An IRS Intrusion.
Most people think an audit is a notice from the IRS they want you to pay more money. But actually, we think an “audit” is something much more comprehensive and something every business owner should be doing annually. As a full-service accounting firm, our view is that financial audits are just one component of smart planning to help your enterprise grow. We also think auditing other aspects of your business can help increase profitability and mitigate risk.
One example is an insurance audit. Does your business have adequate liability, worker’s comp, health insurance, cyber security, or key partners’ coverage? If you own real estate or other significant fixed assets, are those investments adequately covered against loss due to fire, earthquake or other adverse events? For all of these coverages, are your current costs and carriers the best options for your business today? And while you’re auditing your business coverages, what about re-examining your personal insurance protections: life insurance, disability coverage, home, auto, long-term care, etc. Do your policies adequately protect you and your family?
Related to insurance coverage, do you have a buy/sell agreement in place between you and your business partners? Should one or more partners die unexpectedly, do you want a surviving spouse to now be a part of your company? What happens in the event one partner gets a divorce? How does that affect the partnership and ongoing operations?
Now is a good time to do an HR audit too. Evaluate your labor force. Do you have the best team in place? Are your compensation and employee benefits competitive within your industry; are they an incentive or disincentive to attract and retain the best talent? Do you have a 401k plan? Is it the right plan for your business today? Do you have metrics in place to evaluate each and every employee’s performance and a system to review that with your staff at regular intervals?
And what about your company’s legal matters? Is your employee handbook up-to-date and has every employee read and signed a copy of that document? Are your business licenses, Secretary of State Statement of Information, and fictitious business name statement filings current? Are your contracts, their terms and conditions, and other forms up to date? And personally, do you have an estate plan with wills, trusts, durable powers of attorney for
We also believe it’s important to audit your supplier resources, reliability, quality and cost efficiency. This includes raw materials and manufacturing partners, but also distribution providers, banking and financial partnerships, marketing and advertising relationships and yes…even your accounting and financial team.
At Blieden CPA, we consider ourselves to be more of a business partner than an accounting resource for our clients. That’s why we consult on the full array of business services discussed in this blog. We handle issues like financial reporting, breakeven analyses, cash flow planning, payroll, income and sales tax planning and filing, and even business brokerage services for owners looking to buy or sell a business. Also, we have well-established relationships with professional service providers in all the other areas of business management allowing us to offer comprehensive business consulting services.
Based in Arcadia, California and serving all of Southern California, please call Norm Blieden at 626-440-9511. Or email him at: email@example.com for more information.