For a business of any size, maintaining accurate financial records is very important. All businesses should be organized enough to generate a current and accurate income statement, balance sheet, or cash flow statement at a moment’s notice. While most companies are able to do their own accounting, it would be a good idea for a company to have a full audit completed at some point. There are several situations in particular when it would be a good idea to hire a firm to audit your financial records.
The first situation when you should hire a firm to audit your financial records is when you are looking to potentially sell the company or find additional investors. When looking to sell or get new capital, the buyer or investors will base their decisions largely on your historical financial performance. Having an audit completed will ensure that you have a clear and accurate picture of what your recent income statements have reported and that your balance sheet is cleaned up and accurate. Having an audit prepared to show the potential buyer or investor will also give them comfort that the financial statements that you are preparing are accurate and properly prepared.
Another situation when you should consider hiring an outside accounting firm to audit your financials is when you are looking to hire a credit card processing firm to handle your merchant accounts. When you have merchant accounts through a credit card processing company, the company will be ultimately extending you a line of credit which normally ensures that you get paid from the credit card processor before they are paid by your customer. Since the merchant account provider will be taking on some risk, they will want to ensure that you are financially solvent.
If you are considering taking out a loan from a bank, you will also want to have an outside firm complete an audit of your financial records. Similar to investors and buyers wanting to review your financial records, most banks will want the highest quality financial statements to analyze before they make a decision based on whether or not they can provide you with a loan.