A2X Newsletter (for Online Sellers) | Audit readiness checklist for ecommerce
If an audit is on your radar – whether for fundraising, a loan, or an exit – preparation is the key to shortening timelines and reducing fees.
I sat down with Lonnie Bloom, Audit Partner at Withum, to walk through an ecommerce-focused audit preparation checklist and share practical tips for getting audit-ready.
▶️ Watch the full video (27 mins), download the checklist, and scroll down for key takeaways. ⬇️
Need help getting audit-ready? Get in touch with A2X or reach out to the team at Withum.
Why audit readiness matters
An audit is more than compliance – it’s proof your numbers are trustworthy for investors, lenders, and potential acquirers. Lonnie defines audit readiness as proactive preparation for financial scrutiny – clean books, documented accounting policies, scalable systems, and sound internal controls.
How long does a first-time audit take?
According to Lonnie, a typical first year audit can take 8-10 weeks if reconciliations and docs are ready. In the worst case, missing docs and resources can stretch an audit many months.
Who needs to be audit-ready?
If you’re raising capital, taking on debt, preparing for an exit, or facing regulator scrutiny – make audit readiness a priority.
The audit readiness checklist (practical highlights)
Lonnie’s audit readiness checklist for ecommerce is grouped by company stage so you can pick what’s relevant for you.
Stage 1: Foundational setup
- Clean chart of accounts mapped to financial statements.
- Monthly reconciliations – bank, credit cards, payment platforms.
- Documented accounting policies – revenue recognition (ASC 606), leases (ASC 842), etc.
- Digital, secure document storage for contracts, invoices, receipts.
- If you have inventory – visibility into your 3PL (Third Party Logistics) and cycle counts.
Stage 2: Operational maturity
- Automate order-to-cash and revenue reconciliations – integrations between Shopify/Amazon/Stripe and your books.
- Use transaction-level automation (e.g., A2X) to reduce manual reconciliations and errors.
- Implement rolling cash flow forecasting (13-week).
- SKU-level inventory reconciliations between 3PL and ERP/general ledger.
- Start formalizing segregation of duties and basic internal controls.
Stage 3: Audit & exit readiness
- GAAP-compliant financial statements and a repeatable reporting package.
- Sales tax compliance review across jurisdictions.
- Inventory obsolescence reserves and policies.
- Stronger IT general controls – change management and access controls.
- Key finance hires or outsourced experts to act as audit liaison.
Stage 4: Strategic exit / IPO prep
- Investor-grade financial statements, clean cap table, centralized finance function, continuous controls, and advisors in place.
How automation can help with an audit
Automation gives you consistent, auditable transaction detail so auditors can trace revenue, fees, and deferred revenue without hunting through spreadsheets.
According to Lonnie, if a company is using automation and has clean reconciliations, the audit team’s job is so much easier – audits run faster, issues are fewer, and fees are lower.
Top mistakes that can slow audits
- Not using transaction automation – heavy spreadsheet reliance.
- Poor inventory visibility or weak 3PL reconciliation.
- Sales tax exposure or missing filings.
- Weak revenue recognition policies or missing reconciliations.
- No documented internal controls.
How Withum can help
If you’re not audit ready and an audit is coming, Lonnie recommends a 30-minute consult to scope:
- Pre-audit readiness assessments (policies, cap table, major accounting issues).
- Clean-up support for monthly books, revenue schedules, and inventory reconciliations.
- Sales tax and inventory consulting.
Get in touch with Withum here.
▶️ Watch the full conversation (27 min)
Questions about the checklist or how A2X fits into your audit readiness plan? Reach out to the Withum team.
