Whether your business is large or small, chances are you cringe at the word “audit.” The word brings up images of humorless tax agents, dull rooms without windows, stacks of unorganized (or missing) receipts, and hours of agony. While the process of an audit will probably never be what one would call “enjoyable,” here are a few tips for making your next audit a little less odious.
Save everything.
Have you ever thrown out a receipt only to wish the next day that you still had it in hand? There is a simple, easy solution to this problem: do not throw things away. Regardless of how insignificant it may seem at the time, hold onto that receipt. After all, the minute, nitty-gritty financial details are what audits are all about.
Keep everything you have saved somewhere special.
After you have saved every scrap of paper you could possibly ever need, the next (and crucial) step is to organize it so you can find the exact piece of paper you may need later on. Do not choose an organizing system that only you will understand. The files should be easy enough that anyone in the office can navigate them.
Purge your files periodically.
While saving everything is a great idea, holding onto it forever is not (just ask your grandparents). Once you have trained yourself on how to file, be sure to clean out those files periodically. If you are only likely to face an audit once a year, clean out your files on a yearly basis. Be sure, however, to save basic financial information indefinitely.
Be helpful, patient, and very accommodating with the auditing agent.
This is a given (but could use repeating). When that accommodating veneer begins to wear down, just remember that a smile has smoothed over many a rough situation. While anger and hostility has never done anyone being audited any good.