Financial Audits for SMEs: When Do You Need One & How to Prepare?

For UK small and medium enterprises (SMEs), financial audits can seem like an overwhelming process. However, understanding when they are required and how to prepare can make the experience smoother.

Does your SME need an audit?
In the UK, a statutory audit is only mandatory for companies that meet two of these three criteria:

• Turnover exceeding £10.2 million
• Assets worth more than £5.1 million
• More than 50 employees

Even if your business isn’t legally required to conduct an audit, many SMEs opt for voluntary audits to enhance credibility with investors, lenders, and potential buyers.

How to prepare for an audit

1. Organise financial records – Ensure all transactions, invoices, and receipts are well-documented.
2. Review internal controls – Strengthening financial processes helps prevent discrepancies.
3. Use accounting software – Digital tools streamline record-keeping and reporting.
4. Work with an auditor early – Engaging with auditors ahead of time can prevent surprises.

A well-prepared audit process builds trust and provides valuable financial insights, helping your SME stay compliant and grow.