Business owners must be prepared for everything. When you are managing your business being business ready is important, particularly your accounting records. As a business owner that has been audited several times before, preparation was always the key for me.
At some point in time, you will be audited from the IRS to your business operations, especially if you are a contractor. Let me give you a few scenarios in how to be prepared. For this example we will look at it from the perspective of being a certified supplier.
As a certified supplier, you have obtained several projects with your ideal customers. Your main focus has been to provide an excellent customer experience. Then you are suddenly called upon for an audit to check to see if you are working according to the terms and conditions of the contract.
Don’t panic you got this, that is if you are truly operating as a business. To minimize your time and energy on the audit, here are three steps that you can take prior to being audited: 1) Assess where you are. As you assess your business from operations to financially it will help you in determining where your weaknesses lie. Once you identify these weaknesses begin working on strengthening it. 2) Assure that you have an adequate accounting system in place so that you can respond quickly to the requests. There may be times that you may be asked about your invoicing, financial reports (i.e. Profit and Loss – P&L) or contracts. It is best to be prepared than sorry and 3) Have a strategy in place to provide the needed documentation quickly and within the timeframe provided. This will eliminate any penalties or probation being applied.
All of these points are important because you never know what will be required of you during the audit. The goal is to be proactive and not reactive and you can do this by being business ready. Stay tuned and I will tell you another reason as to why being business ready is important.
Connect with me at Jabez Enterprise Group (JEGroup), @JEGroupBiz, LinkedIn, Facebook to see what we are doing next and pick up a copy of Get the Cheese, Avoid the Traps: An Interactive Guide to Government Contracting, if you are looking for ways to grow your business.
Published Author, Speaker, Founder/Owner Jabez Enterprise Group (JEGroup)
“Don’t think small or your limitations, think business” Vernita Naylor