Why an audit provides essential insights for businesses

Are you making the most of your audit? Bryn Luffman of Nottingham chartered accountants Page Kirk discusses how audits can improve and add real value to your business.

Audits help business owners to have a greater understanding of the systems and controls that affect their company's growth and profitability. They may appear as a painstaking necessary evil, but audits can provide real value to businesses beyond simply complying with regulations. By undertaking an audit, you can potentially identify cost savings, provide credibility and instil confidence for shareholders.

Here are just some of the specific benefits:

Improved internal systems and controls

Many businesses believe in the philosophy of 'if it ain't broken, don't fix it', which is sometimes true. All too frequently, however, this attitude can prevent businesses from operating in a more efficient way and taking advantage of technology. Audits provide insights that help to improve internal efficiencies, such as recognising tasks that can be automated in order to save time and money.

Understanding of where a business is heading

As businesses scale in size, business managers are often too busy with day-to-day activities to think about long-term plans. Audits provide logical certainty that can help with informing new decisions.

Providing increased credibility

Lenders

An audit provides assurance and credibility to your business, allowing it to be more successful when operating in the marketplace. It can also help improve your chances and reduce the cost of raising finance, as lenders have proof that your company is reputable and trustworthy. By accessing cheaper finance, you can promote further growth for your business.

Shareholders

If your business deals with shareholders or trustees, audits instil confidence and provide a true representation of your company's position within the market. They can inform shareholders on the direction in which the business is heading, allowing for strategic decisions that make the most of the opportunities within the business environment.

Suppliers

We often find that suppliers will have a look at a company's financial information before closing a big deal, as this provides them with assurance that the business will keep on top of payments and be a good customer. An audit promotes a dependable and trustworthy image and provides unbiased information on your firm's ability to pay.

Selling

If you are looking to value or sell your business, an audit provides reassurance to the purchaser. This ensures that your business is being valued accurately, rather than undervalued.

Audits can be a valuable asset to businesses, but the type of audit depends on the objectives, legal status and requirements of the company. An auditor should be an excellent communicator and take the time to understand the details of your business to collect the correct information.

Are you are looking for statutory audit, internal audit or voluntary audit? Are you feeling like you are not getting the best out of your current audit service? Would you like to find out more about our audit services? We can help you get the most out of the auditing process and create a plan for your team to work alongside us to allow a smooth auditing process. Please contact us on 0115 955 5500 or email enquiries@pagekirk.co.uk to find out more.