Is Your Documentation Ready for an Audit?
- jdelgado318
- 6 days ago
- 5 min read
Audits check whether your business can prove its activity with accurate records—quickly and calmly. When accounting is organized and consistently balanced, you cut rework, reduce risk, and move faster. So, is your documentation ready for year-end?
What Auditors Actually Ask For
Auditors think in categories. Organize your files the same way.
Corporate & Legal
Formation documents, ownership updates, brief meeting notes
Active business/professional licenses
Financial
Prior-year financial statements and current trial balance
Bank and credit-card statements with monthly reconciliations
Loan agreements and payment schedules
Fixed-asset list with invoices and in-service dates
Revenue
Bank deposit detail by date
A/R aging (who owes you and for how long)
Evidence that deposits tie to source documents (bank deposit slips, merchant/lockbox summaries)
Payables & Vendors
A/P aging (who you owe and for how long)
W-9s on file for vendors (as part of vendor packets)
Vendor contracts/SOWs and—when needed—certificates of insurance (COIs)
Payroll
Payroll registers (by pay period)
PTO/leave policy
Timekeeping records and approvals
For Medical Practices
Lien documentation and settlement statements for PI cases
Financial Policy for refunds/chargebacks/write-offs
(If applicable) payer or facility agreements kept for reference—no billing records included
5 Common Gaps That Trigger Follow-Up Questions
Deposits don’t trace to source documents. Bank totals should agree to deposit slips or merchant/lockbox summaries.
Old credits or unapplied cash in A/R. Anything >60 days raises flags.
Missing vendor paperwork. No W-9 or unclear contract terms = weak support.
Thin loan/asset support. Missing schedules, invoices, or in-service dates.
Policy mismatches. Refunds/adjustments/write-offs handled differently across staff.
Quick Audit-Readiness Checklist
(12 items. If you can’t check it today, assign an owner and due date.)
Confirm bank/CC statements are reconciled through last month.
Trace deposits to source documents (deposit slips, merchant/lockbox summaries).
Note a reference on each deposit line (date, slip/summary ID).
Maintain A/R aging with no unexplained credits/unapplied cash >60 days.
Document refund/adjustment/write-off rules (one page).
Centralize payer/facility agreements if you maintain them for reference.
Verify W-9s are on file; keep a live vendor list with W-9 status.
Archive vendor contracts and COIs (if required) with renewal dates.
Update fixed-asset list with invoice, serial/ID, location, in-service date.
Retain loan agreements and a simple amortization/payment schedule.
File payroll registers by pay period; totals agree to the general ledger.
Standardize a folder structure and naming scheme to locate any file in <60 seconds.
Simple 30-Day Action Plan for Documentation Ready
Week 1: Collect & Centralize
Build one “Source of Truth” folder: Corporate, Financial, Revenue, Vendors, Payroll, Fixed Assets, Loans.
Download last 12 months of bank/CC statements and reconciliations.
Use consistent names: YYYY-MM – Category – Short Description.
Week 2: Trace Cash & Clear Credits
Create a deposit log (date, amount, deposit slip/merchant summary ID).
Tie each bank deposit to its source document; flag differences.
Clear unapplied cash and old credits; document each resolution.
Week 3: Vendor & Asset Refresh
Request missing W-9s; organize contracts/COIs; set renewal reminders.
Update fixed-asset list (what, when, where).
Confirm loan agreements and payment details.
Week 4: Mock Request & Assign Owners
Pretend an auditor asked for the list above—can you pull everything fast?
Close gaps. Assign owners for: deposit tracing, AR credits, vendor packets, assets, loans.
Add a 30-minute monthly review to keep it current.
How to Keep It Audit-Ready All Year
Monthly close rhythm
Cut-off: Close by the 15th business day.
Review: deposit tracing, AR credits >60 days, AP statements, asset/loan updates.
Sign-off: One-page checklist initialed by the owner/administrator.
Single source of truth
Keep the same folder map and naming rules all year.
Limit edit access; track who updates what and when.
Lightweight SOPs (one page each)
Refunds: When allowed, who approves, how it’s recorded.
Adjustments: Common reasons, approvals, posting steps.
Write-offs: Age/amount rules, who signs, posting method.
Retention: What to keep, where it lives, and for how long.
Callout: When your accounting stays fully organized and consistently balanced, audits move faster—and your team makes decisions sooner.
Schedule a review with me. We’ll spot documentation gaps and give you a clear 90-day fix plan—so you stay focused on patient care.
FAQs
What documents do auditors request first?
Entity documents, prior-year financials, current trial balance, 12 months of bank/CC statements with reconciliations, A/R and A/P aging, payroll registers, vendor contracts, and fixed-asset support.
How do I prove deposits are legitimate without billing records?
Keep a deposit log and attach source documents: bank deposit slips, merchant/lockbox summaries, or other bank-provided detail that equals the deposit total.
Which vendor documents matter for audits?
W-9s, contracts/SOWs, COIs (when required). Maintain a live vendor list and note W-9 status.
How often should I update my fixed-asset schedule?
Monthly. Add new items with invoice and in-service date; retire disposals; confirm totals agree to the GL.
What’s the easiest way to prepare for an audit in 30 days?
Centralize files (Week 1), trace deposits and clear credits (Week 2), refresh vendor/asset/loan support (Week 3), run a mock request and assign owners (Week 4).
Educational only.
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