Why an Internal Audit is Essential to Maximizing Business Profit

Why an Internal Audit is Essential to Maximizing Business Profit

As a small business owner, you have no choice but to be frugal with your spending. You’re trying to grow a business and you need to spend every penny wisely, as well as track all expenditures. You can quickly find yourself with a cash flow problem if you don’t remain fiscally conservative. Unfortunately, it’s common for entrepreneurs to let budgeting and expense reporting get away from them. They’re busy with what seems like a million other tasks and not keeping an eye on expenses like they should.

 

Audit Yourself Regularly

 

Most small businesses fails within the first two years of operation. If you want to beat the odds, it’s important to routinely audit what you spend and determine if the expense is still necessary. It will help you course correct costly decisions and adjust your spending to reflect the current reality of your business.

 

Every business owner makes a bad decision or two, especially in the beginning. That great wholesale deal you expected to be a best seller didn’t materialize as you had hoped. There’s no shame in making a mistake, but you need to stop spending money on something once you realize it’s no longer working for you. It’s also important to recognize when your business needs change and to allocate funds accordingly.

 

Little Expenses Add Up

 

Many online tools exist that promise you great time savings and nearly effortless bookkeeping or administrative work. That sounds good, so you sign up for a free trial. The service converts to a paying subscription at the end of the free trial and you’re too busy to notice. Before you know, several months have passed with you paying for a service that didn’t live up to its promises. It might seem like a small thing; however, taking an automatic rather than a mindful approach to every dollar you spend for your business could be a disaster waiting to happen. Here are some other common money wasters for small businesses:

 

Expensive advertising:

The desire to have people know about your company as soon as possible can lead to some hasty advertising decisions. Take the time to study the marketing agencies promising you such great results and never give into pressure to sign a long-term contract so early in the life of your business.

Paying for unused space:

It’s great that you have your sites set high and want to eventually occupy a lot of office or retail space. In the meantime, only pay for the space you really need or work from home if possible. You can always move up later.

Spending too much time on administrative tasks:

Particularly when you could be completing billable work. Although it’s hard to let go, learning to outsource can save you both time and money.

 

 

No Time to Complete Routine Audits? We’re Here to Help

 

You may not know where to start when reviewing your business expenses and that’s okay. We invite you to contact our Columbia, South Carolina office to learn more about how we can help you audit your expenses today.