Why External Auditors are a Good Investment
As a small business owner, you have enjoyed an up-close view of your organization. Starting entirely on your own, or with a very small number of people, you have been able to closely manage various responsibilities from business development to operations to accounting. Initially, this was simple due to the highly integrated nature of a small business.
However, as your company grows, you may wish to consider the advantages of using an external auditor. Different from an IRS auditor whose main focus is to look for errors, an external auditor is someone outside of your company who analyzes and assesses the way you run your business in order to improve it.
For example, a fundamental aspect of any business, including small ones, is effective process management which optimizes industrial engineering and ergonomics. An external auditor will analyze your growing company’s business processes and offer suggestions for improvement. While an external audit may reveal that your current procedures are effective and need no major overhaul, an expert may still offer a few ways to better focus specific strategies. For example, experts can offer suggestions for better focusing of your social media marketing or tell you if separating sales from your marketing department is prudent at a particular time. While such strategies may not have to be implemented right away, knowing where the proverbial “hurt” is will enable you to implement a particular strategy in the future. Moreover, an auditor can help implement the proposal when the time is right and offer periodic effectiveness reviews afterward.
An external auditor can also optimize Information Technology implementation for a small company. Investing in an experienced IT consultant determines the best customized system for you. Once it is implemented, the expert responds to upgrades as needed which is far more economical than a full-time IT Manager.
Human Resources departments have also found external audits beneficial. As this industry-based website explains, HR audits are dynamic, non-routine and are often focused on the company’s unique needs at a particular time. While some companies choose to handle these audits internally, an external professional offers greater objectivity and allows the small business owner to focus on implementing solutions.
Small companies benefit from business development audits as well. By analyzing external forces, the auditor provides insight regarding customer needs, expectations and behavior. Audits of the company’s internal marketing department provide intelligence regarding the company’s organization, its efficiency and the effectiveness of its strategies. A marketing audit analyzes a company’s current marketing plans and their respective outcomes. Finally, marketing audits evaluate the relationship of a business development strategy to other departments or concerns such as budgeting, recruiting and training. An experienced external expert in business development can help you understand the right approach for your company’s size and focus. An expert can determine if your company will grow most strongly by primarily using an active sales approach or by relying more heavily on passive demand generation via advertising or Social Media Marketing.
Finally, there is the issue of financial credibility. As Samson Crain, writing for Chron, explains, an audit by an outside consultant verifies that your public statements will be more reliable. Your company’s public statements enjoy more credibility when an external auditor verifies them. This is especially true for family-owned and other small businesses as they offer stakeholders the ability to objectively assess your company’s financial well-being.
Ian Erickson is the writer for Aepiphanni, a Business Consultancy that provides Management Consulting, Managed, and Implementation Services to business leaders and entrepreneurs seeking to improve or expand operations. Ian Erickson has been advising managers and clients in a wide spectrum of industries on the most effective strategy for years. Ian discusses situations facing small businesses and how to turn challenges into opportunities.
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