Business Process Audit: What It Is & Why You Need It
Competition is a normal aspect of running a business, and it can either be a motivation or a hurdle depending on how effective your business moves are. In today’s competitive environment, companies must continuously improve the way they do business to remain relevant and competitive. If your business fares well in a competitive industry, you will most likely see your business run longer because of an increase in demand. However, if the competition overwhelms your operations, you can incur costly expenses with a meagre revenue. Additionally, employees will also be less motivated and the demand will decrease.
When it comes to running a business, it is imperative that owners constantly strategise ways on how they can improve their general processes of how they do business. A streamlined operation helps in fostering a strong and competitive business, and a business process audit is one way to accomplish this.
Running an audit report on the business processes helps business owners get a firmer grip on the way they do business and the level of its efficacy. This presents them with an opportunity to evaluate whether or not it can be sustained longer, and find aspects in the process where improvements can be made. Read on to understand what a business process audit entails.
The way a business process audit starts
In order to pinpoint specific areas in the business process that can be improved, it is important that you have a clear understanding of what you currently have. Is there formal documentation of how the various internal processes are done? Do employees have access to them and do they understand it? Are there present aspects that hinder your employees’ productivity and efficiency? And more.
It is important to have an unbiased evaluation to help determine whether or not an audit report on your business processes is needed.
How to run a business process audit
After an evaluation determines the need for a business process audit, the first step would be to run an inventory on the important phases in your business, such as the cycle of stocking-selling of your products or services. To accomplish this, a group consisting of four to six people who work internally will map out the specifics of the product life-cycle.
When the specifics and the different phases in the cycle have been mapped out, these people will put into detail the problems that are usually encountered and how they can be improved. They would usually put into consideration the parties involved in the phase, whether or not it is purely internal or with an external party such as a customer or vendors. They would also typically describe the objectives of each phase and whether or not the existing process helps in achieving it.
After the thorough dissection of every single phase in the cycle, a summary of the findings is constructed which is then ideally presented to the business’s key stakeholders. Based on how intricate your business process might be, it might be a challenge to come up with a more efficient approach and to try implementing it. If the struggle is handled accordingly, the benefits will outweigh the costs of restructuring an established business process.
What it takes to obtain an impartial perspective
The process that is tackled in this write-up is mainly dependent on people who internally conduct the audit because the task requires the knowledge of people who knows the business’s various in’s and out’s. The disadvantage to this is that it can lead to a biased perspective.
An easy solution to avoid a biased opinion is to get an audit firm to run the audit instead. A couple of advantages that involves hiring a well-versed external party to take charge of this part of a company’s operations is: efficiency and professionalism in running the report that you need, an objective and genuine inspection, and heightened credibility.
Audits are crucial for any business as it offers credibility to a company’s financial statements and compliance with regulations, ensure accounts are true and fair to give shareholders confidence, and boost a business’s internal systems and controls. As such, it is of importance for businesses to run regular audits – be it monthly, quarterly, twice a year, or once a year.
If you’re interested in having a third-party run an audit for you – OneStop Professional Services is capable of conducting one objectively and professionally. On the other hand, if you’re looking for other services for a smooth business setup process – we also specialise in corporate financing, financial outsourcing, incorporation of company, accounting, and taxation.