The importance of the auditor's report for self-employed people

As a self-employed person, it is essential to have your financial records in order. An important aspect of this is the auditor's report. Although this term may not appear in your vocabulary on a daily basis, an auditor's report can play a crucial role in the success and reliability of your business. The importance of the auditor's report is great for self-employed people. In this article, we dive deeper into what exactly an auditor's report is, why it is important for self-employed people and how to obtain one.

What is an audit opinion? 

An audit opinion is an official document prepared by a registered auditor in which he or she gives an opinion on the accuracy and completeness of a company's financial records. This opinion may relate to financial statements, financial statements or specific financial data. Its purpose is to give third parties, such as banks, investors or government agencies, assurance about the reliability of a company's financial information. 

Why is an audit opinion important for self-employed people?

As a freelancer, you may believe that an auditor's report is mostly relevant to larger companies. Yet there are situations where such a statement can be of great importance to you too:

1. Strengthen your professional image

Being able to provide an audit opinion shows that you take your financial affairs seriously and operate transparently. This can give potential clients or partners confidence in your professionalism and reliability.

2. Increasing funding opportunities

Should you be looking for funding to expand your operations, for example, banks or investors often require insight into your financial situation. An auditor's report can serve as reliable proof of your creditworthiness in this regard.

3. Fulfilment of contractual obligations

Some clients, especially larger organisations, ask for an auditor's report before partnering with you. This is to ensure your financial stability and continuity.

4. Tax advantages and certainty

Correct and controlled records can help you make the most of tax benefits and avoid tax problems. An auditor's report provides additional assurance in this regard.

How do you obtain an auditor's report?

The process of obtaining an audit opinion is usually as follows:

1. Choose a registered accountant

Not every accountant is qualified to issue an audit opinion. Make sure you engage an accountant who is registered in the Register of Accountants and authorised to issue such statements.

2. Preparing your financial records

Make sure your financial records are up-to-date and complete. This includes your accounts, invoices, bank statements and any contracts. Accurate and organised records facilitate the auditing process and save time and costs.

3. Implementation of monitoring

The accountant will check your financial data for accuracy and completeness. This can range from a limited check to an extensive audit, depending on the requirements and size of your business.

4. Receipt of the auditor's report

Upon completion of the audit, you will receive the auditor's report. You can then use this for the intended purposes, such as submitting it to a client or financier.

Costs and benefits

The cost of obtaining an accountant's report can vary depending on the complexity of your records and the accountant's fees. Although engaging an accountant requires an investment, it offers several benefits that justify the expense in the long run.

An auditor's report can help obtain better financing terms, strengthen your business reputation and meet contractual and legal requirements. Moreover, during the audit process, an auditor can provide valuable insights into your financial situation and help you optimise your records. This can lead to more efficient operations and possibly even tax savings.

Although the price for an auditor's report depends on your specific situation, you can reduce costs by having well-organised records. By supplying the right documents in time and working with an accountant experienced with self-employed people, you can make the process more efficient and less costly.

Tips for a smooth collaboration with your accountant

Getting an auditor's report can sometimes be a time-consuming and complex process, especially if your records are not organised optimally. Proper preparation and cooperation with your accountant can save a lot of time and costs. To make the process efficient and effective, here are some tips:

1. Work digitally

Digitise your records as much as possible. This makes sharing information with your accountant easier and reduces the risk of errors. As discussed earlier in our blog on bookkeeping for self-employed people, working digitally is one of the most important tips for efficient administration.

2. Use an accounting programme

With a good accounting programme, you can keep your finances clear and simplify the accountant's work. This can ultimately save costs.

3. communicate clearly

Discuss with your accountant in advance what the expectations are, what documents are needed and what deadlines apply. Clear communication prevents misunderstandings and ensures a smooth process.

Frequently asked questions

1. Is an auditor's report mandatory for self-employed people?

In most cases, an audit report is not legally required for self-employed people. However, it is required for specific assignments or contracts.

2. What is the difference between a bookkeeper and an accountant?

An accountant is mainly concerned with processing day-to-day financial records. An accountant has broader and in-depth financial expertise and is authorised to issue official statements, such as an auditor's report.

3. How often should I prepare an audit report?

It depends on your specific situation and third-party requirements. Some self-employed people have a statement prepared annually, while others do so only when explicitly requested.

4. Can I do my administration myself or do I need to hire a professional?

Many self-employed people choose to do their daily administration themselves. However, for more complex financial issues and audit reports, engaging a professional is highly recommended.

Security and control

An audit opinion can be of great value to self-employed people. Not only does it provide more security and confidence towards clients and financiers, but it can also help in complying with tax obligations and contractual requirements. Although obtaining an audit opinion requires an investment, it can contribute to the long-term growth and stability of your business. Make sure your records are in order and work with a certified accountant to make the process as smooth as possible.