An audit is one of the most critical business activities that check business operations and ensure transparency. Every business organization is responsible for getting an audit once a year so that the authorities can confirm the absence of financial irregularities and frauds. Business owners conduct internal audits so they can uncover and resolve problems before the external audit process.
The auditors assign a rank or number to the organization after conducting the auditing process. A higher score means transparent and efficient business operation, while low audit ranking denotes discrepancies and problems in financial activities. The auditing criteria of different regions vary. The businesses operating in the middle eastern region face strict legal procedures and requirements during the audit process.
Low audit ranking cannot be left as it is and requires treatment. This article will help you explore ways to boost the low audit ranking of your business.
Top 6 Business Aspects That Need Attention to Improve Audit Score
An audit is not just done to make the business owners aware of their transparent or irregular financial operations. The audit report is shared with other business stakeholders, which significantly impacts their dealings and partnerships. So, a business organization needs to improve its low audit ranking to ensure its operations’ success.
The following are the most crucial business aspects that need attention to improve the audit score.
1. Accounting Records
Accounting records hold a central position in ensuring smooth and transparent financial operations. A little mistake in bookkeeping or accounting record can disturb the future record-keeping, which can compromise your audit score later. So, manage your accounting record efficiently to avoid any mistakes. You can easily follow these tips:
- Monitor changes in bookkeeping
- Pay attention to monthly reports
- Stay on top of receivable and payable accounts
- Learn from previous mistakes
2. Business Cash Flow
Business cash flow is one of the most critical aspects that need your attention if you want to improve your low audit ranking. You must be aware of the inflow and outflow of cash activities to track any discrepancies. It is also mandatory for effective decision making in terms of future planning and investment. The following are some tips to improve cashflow:
- Do not delay invoices
- Ensure to get paid on time
- Reevaluate your operation expenses
- Clear vendors’ payment on time
3. Debtors and Creditors Books
Every business organization has few debtors and creditors. The key to improving low audit ranking is managing debtors and creditors’ books separately. It will help you develop a clear record of what others owe to you and what you owe to others and be aware of your overall business position. Follow these tips to manage separate books efficiently:
- Clearly state payment terms
- Be mindful of the payment period
- Avoid mistakes in invoices
- Make the payment process easier
4. VAT and Tax
Tax payment is another important responsibility of the business organization. The business in the United Arab Emiratesmust pay value-added tax, which is a complicated process. Improper tax calculation and payment can trigger audit activity and earn low ranking for any organization. So, you need to manage error-free VAT and tax and can follow these tips:
- File for tax payment on time
- Maintain proper tax record
- Be clear about your organizations’ tax claims
- Manage VAT returns
5. Payroll Services
Payroll is a constant motivation for employees to work hard. On the other hand, consistent errors in payroll calculation will demotivate the employees and give the wrong impression in the audit process. The auditors can take it as a deliberate act of tempering with accounts and give a low audit score. Follow these tips to improve payroll service:
- Keep your policies simple
- Utilize direct deposit
- Follow payroll schedule strictly
- Outsource service to professionals
6. Business Budget
The key to successfully manage a business is to have a proper budget in front of you. You cannot ensure the long term success of your business if you operate without a budget less plan, because you will not be able to compensate for your loss. It also impacts the audit score of the business due to their lack of preparedness for future challenges. Follow these tips to improve business budget:
- Do not make abrupt decisions but take your time to learn
- Track your expenses
- Develop transparent business accounts and relations
- Develop strategies to deal with challenges
Besides all of this, you can rely on professional support to improve your audit score. You can hire the service of top audit firms in Dubai to identify the problems in your business and fix them to avoid legal penalties. You can also constant support and recommendations to improve business operations.
Pay attention to every business aspect to have a safe audit!
An audit is not limited to one business activity or department. It applies to the overall functioning and operation of the organization. You should pay equal attention to all business aspects and manage them efficiently throughout the year to avoid low audit ranking. Even if you get one, you can improve the functioning of every department to enjoy better rankings. You can also consult professional services to identify and overcome the challenges before they cause you any trouble.