Large corporations get audited all the time. They also have teams of accountants and bookkeepers who are responsible for the accounting practices. If you have a small business, or you are self-employed, you may be a wee bit lazy when it comes to keep your books. Maybe you are the do it yourself type who doesn’t have funds to hire an accountant. You keep a paper ledger marked up with pencil and pen.
That isn’t going to fly with the IRS, potential investors, or your bank. If you are on the verge of bankruptcy, there is a good chance it is because you didn’t keep an eye on the bottom line. Even the bankruptcy trustee is going to want to see your paperwork to see if you pass the means test. Keeping paper accounting ledgers is old fashioned and inefficient. You can lose all of your records in a fire or a natural disaster.
If you insist on doing it yourself, and are intimidated by Excel spreadsheets, it’s easy to learn. A spreadsheet gives you many more options for customization. You can email copies of your accounts to anyone who has to view them, or share them online.
You can also save your accounts in the cloud, so if something does happen to your computer you have your books backed up.
If you feel it is too much work to sit down and input all those figures into a spreadsheet, consider a PDF to Excel converter. This innovative software allows you to take all those invoices, receipts and other information and convert the data to a spreadsheet.
You can store those paper documents away in case audit day comes. Make sure you keep all documentation going back at least three years, or more, depending on the type of business you have and where you are located. In some instances, you are required to keep documents for over six years.
If you find you are going to be audited, now is the time to take those ledgers and transfer them to a spreadsheet. Sounds intimidating, but it can be done with the help of a PDF to Excel converter. An auditor will be less crabby if he or she has an easy to read system. Not that you can influence an auditor with kindness, but it doesn’t hurt to make their job easier.
By keeping all of your records stored in a digital system, you can pull them up at a moment’s notice. It makes it much easier to search for an item or a date, instead of flipping through books.
The business world is heading in the direction of the paperless office and everyone, including auditors, appreciates your effort to make it easier to read, search and calculate figures by using Excel.
If you are one of the holdouts, you are only harming yourself. Sometimes the old fashioned way of doing things isn’t the best way.
Don’t stress. If you have old fashioned values, like honesty, don’t worry about your audit. Everyone makes mistakes, but you will be less likely to make them in the future if you move your books into the digital age.