After the bookkeeper has done their work, it is the business owner’s responsibility to ensure that there is a second level of financial review. This is known as the internal audit and it is a part of a larger accounting system created for clients. Essentially, the internal audit is a checklist that reviews the financial data of the company in order to determine if anything is out of place.
Think of auditing a client’s file like a doctor reviewing bloodwork. There are reference number ranges, and if all the numbers seem to fall within the range, then everything is assumed normal.
Now, let’s take a look at what exactly you should look for in an audit checklist:
Make sure you understand that lost revenue is something to absolutely look for. Don’t look at bookkeeping as an expense, see it as an investment in profitability. The average bookkeeper will charge about $45 an hour, and a great bookkeeper can be as high as $200/hr. If you crunch the numbers on what it will cost to hire a bookkeeper, you can compare that to the number of hours you will gain in sales, marketing, and operations.
Bookkeepers are also great at sorting through personal bank accounts and business bank accounts. When a business owner uses money from their personal account for their business, this is called commingling and it is not recommended. A bookkeeper can help prevent this from happening and help you correctly deduct your business expenses with good record keeping.
Audits from the IRS, Department of Revenue, or Labor and industries, will uncover your mistakes. You can be certain that when they start looking into your books, they’re usually going to find a paycheck for themselves, if possible. That is why getting the proper bookkeeper is very important. If a bookkeeper is really helping, it’ll pay for itself and provide guidance which will further help to grow the company’s bottom line.