Western Australian business owners wanting to grow their companies are overlooking a fundamental step which can make the difference between growing the business or going bust – businesses are missing the benefits of auditing the books as a powerful tool to shift their operations into the next gear. The first step for any business wanting to expand their operations is knowing all facets of the business in its current state.

An audit is similar in many ways to a yearly car service. The vehicle might be operating well but you need an expert to see if the engine is running at its optimum level and if there are any wearing parts that need fixing or replacing, to prevent a breakdown.

Quite often I work with clients who look at their revenue and the current market conditions as the primary driver of business growth and overlook the service history of the company or worse they don’t have one.

Privately owned companies wanting to list on the ASX need to have their last three annual reports audited and if they are not up to date with their audits, it takes more time and money to do it retrospectively.

The engine room of WA’s economy is revving, and industries that support the mining and resources sector are at full tilt and looking to expand, but business owners must be ready to present their best business cases to the banks to get finance to grow. An audit can make the difference between getting finance approval and putting expansion plans on the backburner.

Financial institutions are mainly interested in how the business is running, its ability to pay its debt, if it has strong books, good governance and there are no legacy issues that will impede growth. It is not just the banks that need the reassurance of an audit, larger companies, particularly international organisations want assurances around the underlying solvency health of their suppliers. Fledgling companies that want to play in the big leagues need to prove they have the stamina and industry staying power, and that all areas of their operations can go the distance.

In my experience, those companies that get yearly audits have a complete service history of their operations which has assisted them to grow, expand operations and made significantly more money when the business goes on the market.