The importance of end-of-year AP audits

Conducting an internal accounts payable audit at the end of the year can help companies identify last-minute tax deductions, according to CNBC.

"Cleaning (accounts payable) up before the end of the year will help not only your tax picture but your balance sheet as well," according to the news source.

The media outlet notes that additional tax deductions can be found through a number of different channels, including giving year-end cash bonuses to workers, claiming depreciation deductions on new and used equipment, donating cash or inventory to charities recognized by the Internal Revenue Service and ordering supplies for 2012 ahead of time.

In addition to revealing previously overlooked tax deductions, AP audits can also uncover less positive aspects of a company's balance sheet, such as embezzlement or unintentional misappropriation of funds.

If financial noncompliance is uncovered, steps must be taken to address what's already happened and mitigate further damage. In the instance of embezzlement, the employee should be held accountable and the case reported to the authorities. With regard to good faith mistakes, reeducation or other action may be necessary. 

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