How start-ups can take the pain out of auditing – and save time and money

Modern cloud-based ERP systems can automate your audit process and provide auditors with the insights required, keeping your costs to a minimum.

For start-ups and fast-growing businesses, where things are changing rapidly, the audit process – whether internal audits or external auditors signing off the year-end accounts – can often feel onerous and painful.

The finance function in a growing business is primarily looking to enable the business to accelerate its growth path. This generally means it’s ‘all about sales’ or, in other words, generating cash.

And compliance-focused audits can feel, from both a time and cost perspective, poor value.

In addition to that, a hairball of disparate and incompatible systems and processes can hinder the ability to answer those important audit questions easily or quickly.

A solution to your start-up’s auditing issues

Better and more modern systems that can provide data transparency and the answers required are not the future, however. They are available today. And they’re not just within the reach of large enterprises with deep pockets.

If you’re a fast-growing start-up, investing in a modern cloud-based finance system that will enable a more efficient audit should be a priority.

It is now possible to automate much of the audit process, which has the added bonus of enabling auditors to examine much larger tranches of data.

You want your finance system to be able to flag up issues, and filter information, effectively.

Take invoice payables, for example. You want a system that flags up items above a certain value or spots an increase in volume of invoices from a particular supplier.

The benefits of cloud-based ERP systems

Keep start-up costs down

One obvious driver is that this will shorten the audit process – and reduce cost.

Auditors will bill fewer hours because the information they receive can be better analysed and discrepancies or outlying patterns or figures addressed. That also means the finance team will have more time to concentrate on supporting the front-line commercial functions in growing the business.

Meets demand for real-time financial records

Another factor driving this need for more modern finance systems is that the frequency of auditing is moving towards ‘real-time’ and the scope is expanding.

Tax administrations are pushing for more access to organisations’ financial records.

Standard audit tax files (SAF-T), enabling the audit of VAT filings, are being introduced across Europe. Governments are moving towards an approach whereby they receive sales and purchase data, audit that data, and then complete the returns on behalf of the businesses.

Allows for change

Growth is another issue for audits.

Start-ups are typically expanding quickly and moving into new markets overseas. Multiple local accounting systems will have different internal controls that auditors would need to document and audit. Scaleable finance systems can stop those audit costs rising in line with your business’ international growth.

Ultimately, a global cloud ERP system across the whole business will provide auditors with the insight and reassurance they require from a fast-growing organisation, keeping audit costs to a minimum.

Supports business growth

Let’s consider again the primary purpose of an audit. It’s about checking whether your financial records are accurate, and free of fraudulent transactions. There are legal obligations to file accurate company records and pay the right tax.

An audit is looking to gain assurance that your business is fulfilling its legal duties correctly – and if that process is working well, then you’re more likely to also be supporting the business’ needs for accurate, timely information.

If you pull that all together then finance is supporting the business growth. This then gives confidence to external stakeholders, including potential lenders and equity holders, that the business knows where it is and how it achieves that.

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