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Arguably, we’ve never lived in stranger or more conflicted times.
On the one hand, it has never been easier to launch a new business venture or bring a product to market. This is reflected by small business statistics in the UK, with the number of active SMEs in the private sector having increased by 197 000 to a record 5.7-million at the beginning of last year.
Despite this, an estimated 96% of all businesses still fail during their first 10 years of trading, as firms continue to do battle with a volatile and strained economic climate.
Sure, this figure may be slightly skewed by the fact that a decade remains a long year to stay in business, but it certainly highlights the juxtaposition of starting a company in the modern age.
At the very least, this makes driving sustainable growth within your business incredibly difficult. There are ways in which businesses can proactively look to achieve organic growth over a concerted period of time, however, with the utilisation of auditors offering a relevant case in point.
Here’s how this can help help you to build a successful and generative business, even against the backdrop of a stormy, economic landscape.
The role of auditing in the modern business world
In days gone by, the word ‘audit’ would have been enough to send a shudder down the spines of most entrepreneurs.
After all, this word was synonymous with an investigation from HMRC, which would drill down into your company finances to ensure that the business was meeting its tax obligations in full.
Technological advancement and a constantly changing economic climate have changed this state of affairs, however, turning the process auditing into a seminal business tool. In 2018, auditing is recognised as a proactive means of evaluating the effectiveness of a businesses internal financial controls, from the way in which funds are managed to the accuracy of quarterly fiscal reports.
While a number of businesses may have utilised basic software to create an internal auditing system, however, this type of approach is limited in terms of its potential results. More specifically, internal systems are always likely to be restricted by your own knowledge base, particularly if you’ve never worked in the financial services sector and have an exceptionally small start-up venture.
This can create a worst-case scenario for firms, who invest additional capital into a rudimentary auditing system without achieving the optimal results or a suitable ROI.
This is where independent auditing firms can come into play, however, with companies such as RSM offering a relevant case in point. These companies specialise in the delivery of frequent and proactive audiences, while allowing businesses to achieve an accurate insight into their financial performance and true tax liabilities for the upcoming financial year.
Similarly, they can also highlight any gaps that exist between the perception and the reality of your financial reporting, while leveraging the very best fintech innovations to create accurate figures in the future.
How do auditors offer practical help to burgeoning businesses?
The question that remains, of course, is how exactly do the services offered by auditors translate into direct benefits for aspiring business-owners?
In terms of hosting independent, regular and frequent audits, your business can benefit in a umber of different ways.
Firstly, you’re guaranteed to receive a full financial review of your commercial operations, including detailed reports on costs and revenues.
This information can prove invaluable to firms that are looking to grow, as it highlights potential instances of financial mismanagement or significant overspending, Whether these are isolated or recurring, they can quickly be corrected to reduce costs and improve your businesses bottom line.
When you also hold frequent or quarterly audits, you can access huge data sets that give you a genuine overview of your businesses standing and any seasonal fluctuations.
The use of cutting-edge technology is also important, as this offers you business access to high-end reporting systems that accurately capture your figures. This makes the process of planning easier than it otherwise may have been, as you’re able to deal in pennies rather than pounds and make actionable growth plans for the short and longer-term.
When you’re able to capture your businesses financial performance accurately and over the course of the year, you’ll also have a clear understanding of your tax liability and ensure that this amount is set aside at the earliest opportunity.
The bottom line
As we can see, simply creating internal auditing processes is not enough to empower your firms growth in the modern age.
Instead, you’ll need to leverage the power of independent and reputable auditors if you’re to grow organically in a challenging economic climate, particularly if you happen to operate in a competitive marketplace.
Featured image: mohamed_hassan/1986 via Pixabay (CC0 Creative Commons)
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