Why your Tech Business Should be Regularly Audited
The technology sector is one of the fastest moving and most evolutionary industries in the world.
It’s also one of the most complex, both in terms of its diverse range of products business models that underpin certain firms.
With the tech sector and its various niches also renowned for their competitiveness, this post will explore the importance of sound financial management and ask why firms should be regularly audited by expert service providers.
- Acquisitions and Mergers Rely on Accurate Financial Reports
The technology sector sees an extraordinary amount of high-value acquisitions and mergers each year, as large corporations strive to partner with innovative start-ups. In 2016 alone, tech companies from across the globe announced $500 billion worth of transactions, helping this year to record the second highest annual total since the turn of the century.
In order for tech firms and start-ups to become eligible for an acquisition or merger, however, it’s crucial that their finances and well managed and reported as accurately as possible.
This not only optimises the value of the venture, but it also provides a strong starting point for negotiations with potential partners.
- Identify ways in Which Costs can be Reduced
In the case of some tech firms, the cost of manufacturing products or delivering services can be relatively high. This is especially relevant to companies that deal in new and inaccessible tech, as costs are notoriously higher to users.
While these costs are often reflected by the prices that businesses charge to their customers, this can have a negative impact on the volume of sales that you’re able to execute.
Instead, it’s far better to conduct regular financial audits, as this can identify inflated operational costs and areas where you can save money without compromising on the quality of your value proposition.
- Ensure that you Comply with Real-time Tax Laws
On a similar note, tech firms are likely to have a considerable amount of capital tied up in their intellectual property. As a result of this, there is very little margin left for financial error, particularly when it comes to tax repayments and compliance.
It’s therefore crucial that your company remains compliant with real-time tax laws, which have continued to evolve at a rapid rate in recent times. If you fail to achieve this, you may well find that your business fails to meet its financial requirements, which will incur further sanctions and considerable fines.
You can avoid this by investing in regular audits, as this offers you a better insight into your tax liability and enables you to accumulate the necessary funds to make accurate annual repayments.