For most CEOs or small business owners, the word audit brings anxiety. It’s easy to imagine piles of paperwork, grilling from finance professionals, and a process that pulls your attention from actually running the business.
But here’s the truth: getting audited might be one of the best things to ever happen to your business.
Let me explain why—starting with my own story.
My Painful Audit Story
Back in 2015, my business was on a steep growth curve. Strong product, loyal customers, rising revenue. We were winning.
To support that growth, I approached several banks about an ABL (Asset-Based Line of Credit). On paper, it looked like a no-brainer. We had solid inventory, reliable accounts receivable, and a proven sales track record.
Then came the bank audit—and reality hit hard.
At the time, we were using a patched-together, homegrown financial system that had scaled with us—but just barely. I thought I had a handle on the numbers, but the audit revealed some glaring issues:
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No CFO
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No budget or forecasting system
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Inconsistent, messy financial reporting
It wasn’t just a tough moment—it was a wake-up call.
Turning Pain Into Progress
That audit forced me to confront our financial blind spots. And as painful as it was, it kicked off a transformation that made our business stronger in every way.
Here’s what changed:
1. We Hired a Great CFO
Bringing in a seasoned CFO was a game-changer. We finally had someone focused on creating clean, actionable reports—and driving smarter decisions across the business.
2. We Built Budgets and Forecasts
For the first time, we weren’t flying blind. Rolling forecasts and monthly budgets gave us visibility into cash flow, expenses, and performance gaps.
3. We Rebuilt Our Financial Systems
The patchwork system was replaced with a scalable, professional-grade platform. Our numbers became reliable, timely, and trustworthy—for us and for any external review.
4. We Gained Financial Confidence
With the right leadership and tools in place, we could walk into any bank, pitch any investor, and know our numbers would hold up. Our margins improved, and we made decisions faster—with less second-guessing.
Key Lessons for CEOs and Founders
Looking back, the audit wasn’t a setback—it was a turning point.
Here’s what I’d share with any business owner aiming to grow:
1. Hire the Right Financial Leadership
Whether it's a part-time controller or a full-time CFO, you need someone who lives and breathes numbers. They’ll uncover issues you didn’t know existed—and give you the tools to fix them.
2. Build Real Reporting and Forecasting
Good reporting isn’t optional. Forecasts help you spot cash shortages before they happen and align spending with strategy. If you don’t have these tools, start now.
3. Embrace Audits as Opportunities
Audits aren’t punishment. They’re pressure tests. They show you where you’re vulnerable—and give you the clarity to fix what’s broken. Treat them as a springboard for growth.
Why This Matters
If you're planning to scale, secure funding, or eventually sell, your financials have to hold up. Banks, investors, and buyers want confidence in your numbers. A strong financial foundation isn’t just helpful—it’s required.
In the end, that painful audit in 2015 was one of the best things to happen to our company. It forced us to grow up financially—and that maturity paid off when we eventually sold the business to private equity.
Bottom line: Don’t wait until an audit to get serious about your financials. But if one’s coming? Lean in. It might just be the start of your next big breakthrough.
