Audits. You are constantly auditing every year. Monthly and quarterly, you might audit flooring inventory, or parts inventory. Annually, you might be auditing your 401(k) plan deductions, meals and entertainment expenses and categorizing assets for depreciation. Less frequently, you might be audited by outside agencies such as the DMV. Auditing your records can uncover deficiencies in processes and provide the opportunity for improvement. A DMV audit can uncover gaps in the sales process when issuing temporary permits for vehicles that leave the lot. A 401(k) audit may uncover improper employer match calculations in payroll or missing paperwork.
When audits are unexpected they can induce anxiety to team members. If the process for forms completion weren’t followed correctly, fines will generally be assessed. It may cause for the need for a follow-up audit at a later date, often with steeper fines.
Scan123 can remove the stress of audits, let us show you how.
1. Get Organized
When an auditor walks onsite and requests specific information for an audit, they will notice whether you are organized or not right away. Do you know who is handling your processes, what processes they are using and how well they complete their tasks? How are your records accessed? Are DMV trip or temporary permits quickly available online or are some stored in your filing cabinet or in another office?
Organization speaks volumes to an auditor. If they can recognize a process and proper documentation, if an infraction is discovered, you may be left with only a warning. When you make organization a priority, and the auditor requests specific files, the files are complete and quickly accessible. And, if your process and management is accurate, they won’t find infractions at all.
2. Scan all business documents
When deciding how to organize your business documents, scanning your documents should be a priority. Scanning documents allows you to review the documents before filing away as well as keeping them very accessible in the future. With electronic document filing your have multiple ways to recall your documents later. Do you scan your 1099-MISC files in your Accounts Payable cabinet or Taxes cabinet? If you weren’t sure, you could do a Global Search which will locate the 1099’s regardless of which cabinet they are filed within. With paper filing, the only one who can file the file is the person who filed it. You are unable to search a database or be guided to find your files.
Organization within electronic filing is just as important as it is with paper filing. Be thoughtful with your file names and folder names so you can find your files later. When transitioning to electronic filing, think about how you file documents on your computer and the naming convention you use. With an abundance of characters allowed within a Scan123 keywords box, you can add as many descriptors as you need. For a car deal, include the customer name, phone number, vehicle stock number and VIN. When searching in Scan123, you are able to use any and all of these keywords to quickly recall your file. The more information tagged on a document, the easier it will be for you to locate the file later. Communicate with team members so that everyone is on the same page and knows how documents should be filed. If you are filing 401(k) documents, will those be filed with the monthly payroll records or within a separate 401(k) cabinet? Communication will allow your team to establish an efficient filing system.
3. Create an Audit cabinet
You’ve got word that an audit is coming your way. How should you prepare? With technology improvements in the last several years, auditors are often using electronic files as a part of their routine process. When facing an audit, it’s generally advised to provide the records requested, but not more. Too much information isn’t always a good thing. Indirectly coming across a document with issues may cause the auditor to dig deeper and the potential for fines increases.
In order to mitigate risk, create an Audit cabinet. Similar to a USB flash drive holding your electronic documents, the Audit cabinet will safely hold all of the files requested by the auditor. Unlike a USB flash drive, once the cabinet has been created, you will have control to what files are saved in the cabinet and what files have been audited. If you were using a flash drive, after the auditor leaves, you might not remember what was provided to the auditor.
4. Upload documents to the Audit cabinet
With the Audit cabinet in place, begin uploading documents as needed. Do you have the documents already in electronic format in another cabinet? Quickly download the files to your Desktop and upload them to the Audit cabinet. In doing so, you won’t disrupt your current filing structure by moving files and need to grant access to a new cabinet for your team members.
Once the audit has been completed, simply delete the files in the cabinet. Keep the Audit cabinet empty and ready for the next audit. This is similar to a tickler file. It’s useful when the project is in motion, but once the project is complete, there is no need to hold a stack of papers. Simply delete the unnecessary files (remember, these are duplicates if already in electronic format) to keep your electronic workspace organized.
5. Grant the auditor access to the Audit cabinet
The last step in getting ready for your audit is granting access to the Audit cabinet. Simply invite the auditor to Scan123 so they can register as a user. Once registered, in Cabinet Permissions, grant access to the Audit cabinet. The auditor will have access to only the files you have specified and won’t see any other cabinets. They will be able to see all of the pertinent documents and complete their audit. With Scan123’s intuitive interface, no specialized training will be needed.
You’ll be pleased at how quickly the audit can be completed with electronic filing. Most likely, the audit will be completed in less time compared to reviewing paper files! Once the audit is completed, inactivate the auditor’s user account. Delete the files in the Audit cabinet and celebrate a successful audit!
Do you have documents you would like to scan in preparation for an audit? Let Scan123 help you get started!
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