When it comes to understanding how to survive an audit, you’ll discover it really isn’t all that difficult. Granted, not many people out there enjoy being audited, but more and more businesses are adopting audits as a way to keep costs down and to make sure there is compliance with various regulations, both local and federal.
The first thing to understand when you want to know how to survive an audit is that you’re not engaging in a battle. Too often, the individuals involved in the audit don’t exactly understand the purpose of an audit; they wind up being defensive and providing very little cooperation. This is precisely the wrong tactic to take. If you’re being audited, you should fully cooperate. It’s much easier to survive an audit when you and the auditor are on the same page, rather than on opposite sides of the battlefield.
One of the keys to surviving an audit is to be prepared. You should have all of the necessary documentation for budget and expense reports. In the event that you don’t have the proper receipts, you should provide any information that you can, including where the expense happened, the events surrounding the expense, and why no receipt exists. One way to ensure accountability is to engage in “audit-proofing” yourself during business trips. To do this, you need a corporate card that is directly linked to your account. Make sure that every expense you incur is placed on the card. That way, when an audit happens, you’ll be able to provide complete documentation for all expenses.
One of the reasons many companies have problems with audits is that their personnel have not been properly trained. Some companies do not have an expense policy in place, which means that while certain personnel might be very cost-conscious, keeping or taking pictures of every possible receipt, others might neglect to track their receipts. It’s important that all personnel know what documentation they are expected to produce in the event of an audit.
The benefit of surviving an audit, of course, is that a company can realize tremendous savings. Many times when an audit takes place, companies are able to discover where there can be significant cost savings. Also, when an audit is done in-house or at the behest of the company, it can reveal potential regulation problems that can be addressed before there is an outside audit. Having the best expense report software before and after an audit creates the automated expense policy that keeps business travelers in compliance.
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- 6 Reasons for Implementing an Expense Management System
- How Expense Automation Can Increase Manufacturers’ Profit Margins
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