Why is Business Process Audit Important?

Business process audit

A business process audit might seem complicated and intimidating, but a modern business must consider this as an ally in the search for more efficiency and effectiveness in the business’s value chain processes.

In today’s competitive arena, businesses must continuously improve the way they do business in order to remain unique and competitive in the market. However, if you don’t, you risk higher costs, lesser revenues, less engaged employees, and ultimately less satisfied customers. Once the sales job is done, you must deliver your best on the sale. Before addressing a specific process, you need a holistic view of your business. You need to be able to answer all the queries to make sure that you understand your company.

Benefits of Business Process Audit

✅ Risk analysis and contingency procedures.
✅ Promotes transparency and corporate government
✅ Verification of controls and their suitability to your business
✅ Verification of defined procedures and practices
✅ Information on decision making

Business process audit should always be visualized as an aid element that helps managers, bringing advantages like always having reliable information on how the business processes are running and actually performing.

Objectives of Business Process Audit

Objectives are manifold and varied, but below we have highlighted some of them:

Removal of oddities
✅ Following the business goals and objectives set up by senior management
✅ Continuous Improvement
✅ Risk Control
✅ Better suggestions for improvements
✅ Best management practices
✅ Enhanced productivity
✅ Improved transparency
✅ Safe and reliable information

In order to achieve the above mentioned objectives, business process auditor can make use of various practices.

Audit Planning Must Include the Following

✅ Analysis of Processes

It includes looking for problem areas with a beginning point for the audit. You must develop focused audit trails that should be based on inefficient areas or the identification of poor trends. Moreover, scope is another factor that should be taken into consideration.

✅ Products/ Services Provided to the Customer

It includes analysis of the product supplied, process knowledge about the product, and if there are any unique characteristics, safety items and services provided.

✅ Risk to Customers

Spills, poor delivery trends, recalls and high warranty costs are some of the aspects that you must look for in process auditing.

Areas Your Organization Should be Auditing

✅ Cash Handling

Fraud and misappropriation is costing businesses 5% of revenues every year. And this makes it crucial enough to inspect about the handling of cash within the organization. Areas within a business that deal with cash registers should be audited to ensure compliance with the internal cash handling procedures.

✅ Vendor Billing

Vendor bills should be verified and must be approved for payment. This is one in order to make sure that vendor charges corresponding to the service provided. Billing errors are very common and therefore, it is important to cross check accuracy of all vendor invoices.

✅ Budget Control

The process of budget control should be error free and seamless. What can be done, is have a budget review process that can help supervise budget spending and oversee large expenditures. Management of your organization should be aware of how budget money is actually spent.

✅ Customer Experience

A strategic customer service strategy that is assisted by a great customer service experience can account for customer loyalty. Moreover, the customer service function can also help determine training needs, customer expectations and improvement chances.

There is no doubt that auditing your business processes takes time, and as an independent firm, you are sure to know that time is precious. However, your business process auditing pays to invest a few hours at least every year to help keep your businesses going both smooth and successful.

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