From marketing to niche-specific contractors, small businesses often work with a variety of service providers for many reasons. Many small businesses may rely on word of mouth, online reviews or some other metric to figure out whether they want to work with a given service provider. Even after all the research, there’s no certain way to know if a hired company will do a good job for a project.
Working with companies that haven’t been audited puts a small business in the dark in regards to the trustworthiness and legality of a vendor. This can be especially troublesome if the small business ever gets audited because the external agency auditing the small business may report the business for working with unestablished businesses. For example, a company working in the healthcare space has to be in compliance with HIPAA at all times. If regulatory agencies decide a vendor a small business is working with is not in compliance with HIPAA, it can shut down the entire business.
This is why the auditing of businesses is important. Auditing provides a non-biased, external review of a business and it establishes trust and confidence from investors, employees and clients of a business. Working with an audited company provides several advantages in comparison to working with a company that hasn’t been audited.
The benefits of working with an audited company include:
Screening/Vetting: Unless you have a trusted colleague or friend who’s worked with a company previously, it’s difficult to gauge the credibility of a business. An audited company provides small businesses with buyer confidence; if a small business knows that a company has passed the stringent requirements of an audit, the company is likely well-run and can deliver the promised goods. This provides small businesses with a warranty on their time and capital when selecting a company to hire for a given service.
Compliance: Audited companies also help small businesses comply with the regulations that are specific to their domain. If a small business hires an unprofessional contractor for a project, this can have legal and compliance ramifications in the long-term future. Working with an audited company prevents small businesses from committing any violations.
Expertise: Companies that are audited regularly are some of the best run organizations. If a company has a track record of keeping up and staying in compliance with the constant and changing laws for their domain, they are likely an industry leader. This means that the audited company has a better pool of talented employees that are focused on serving the needs of small businesses. Additionally, many federal and state audits are public knowledge; a small business can look through previous audits to see how a company is run.
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