A business audit can be a daunting experience if you don't have all your ducks in a row. Here are some steps for preparing the documents you'll need to present in an audit.
Organize Records from Your Return
Your auditor will want to see all of the papers that you used to prepare the tax documents. For instance, vendor invoices, receipts, and other sales records will be looked at. It helps to have these organized by month and attached to your credit card receipts.
In addition to your bank statements and receipts, you'll also want to have a record of the checks you've written and received, including canceled checks. The more support you can provide, the better. The neatness of your paperwork can also influence the auditor to believe that you did a careful job of preparing your tax documents. If needed, use bookkeeping services to clean up your records and make them look professional.
Try to Locate Missing Records
If you have holes in your receipts, the next thing to do is try to track down the larger items. You may have forgotten about an electronic receipt that could stand in place of a paper receipt; search through your inbox and print out electronic invoices. You may also be able to contact larger vendors and have them send you a repeat invoice or receipt for your expenses. The auditor may not give you the benefit of the doubt when there are inadequate records.
Speak with an Expert on Debatable Issues
If you realize that you don't have the receipts to back up some of your claims, it can be helpful to speak with a tax law expert to see whether you have any leeway in providing evidence for that type of deduction. You may also need to talk to your bookkeeping services to provide advice for expenses that are tricky to document. For instance, producing printing logs for paper expenses or auto records for employee mileage reimbursements could serve as a record.
Getting an audit isn't a fun process, but it can be made more comfortable for everyone when you have all of the necessary paperwork gathered as best as possible. It can be helpful to hire an experienced bookkeeper (such as one from Nathan Professional Corp bookkeeping) to organize your documents and track down missing copies. The bookkeeper can act as a guide to show you what documents the auditor will be looking for as well. When you're in a compromising audit situation, having professional expertise on your side is a good call to ensure that all of your tax claims are accounted for.