Performing an operational audit can lead to new insights that can help you boost sales and have a more efficient production process. It can also future-proof your business against risks.
An operational audit is an in-depth review of internal systems, processes, and teams. Here are some things you should know about this type of audit: -Identify trouble spots.
Process Review
Operational audits provide a business with an objective overview of company operations. This can yield new insights that lead to better sales, faster production processes and more streamlined systems. It can also future-proof a business from risks and damages.
An operational audit is a more in-depth process than normal internal audits. They are designed to find how things could be done better by comparing the company's performance with the industry standards. For example, if an operation takes 10 days to complete a task, the auditor will compare this with other companies in the same industry and see if the company can improve on the speed it completes tasks.
The audit will also include a review of the quality of the inputs into a process. This helps to determine if the inputs are fit for purpose and whether they are delivered in an accurate and timely manner. A detailed report will then be produced on the findings of the audit.
Internal Control Review
This is when the auditor reviews internal control systems and procedures to ensure they're effective. This includes examining policies, reviewing data, conducting tests, and documenting everything.
The audits identify risks and help managers develop risk improvement initiatives that can reduce the probability of future risks. They can also make the company more competitive by identifying ways to improve processes and reduce costs.
Once the audit is complete, the point of contact at each business unit will receive a report of the results and recommendations. They'll then have the opportunity to discuss the findings with their auditor and submit comments.
This type of review can be difficult for employees and managers to get used to, but it's important to manage change effectively and keep team morale high throughout the process. Use the RACI framework (Responsible, Accountable, Consulted, and Informed) to help teams navigate and adapt to change.
Financial Review
An operational audit examines a company's internal processes to evaluate their effectiveness, efficiency, and economy. This type of audit can Logistics and Distribution help you identify potential risks and improve the overall value of your business. It also helps you meet regulatory requirements and uphold quality standards.
As the auditors explore each facet of your business, they will be able to discover areas that are open to improvement. This allows you to create a roadmap that will lead to improved performance and increased productivity.
It can take a little while to complete an audit, especially if it takes the team members some time to get used to working differently. But in the long run, an operational audit will be worth the disruption. It will ensure you deliver higher-quality, cost-efficient products and services to your customers, resulting in repeat business. It will also boost employee morale and make your team feel more accomplished at work. This will ultimately lead to a better, more sustainable future for your company and the planet.
Management Review
While audits are often associated with financial data, they cover a wider scope of information. The primary sources of information in operational audits are policies and achievements related to the objectives of an organization.
An operational audit allows a business to take an objective look at the company's overall efficiency. This can reveal areas where things aren't working well and offer new insights into how to improve sales figures, streamline production processes, and make the business more competitive in the industry.
However, it's important to note that the process can take some time out of managers and employees' day-to-day activities. Using technology that helps manage the process and minimize interruptions can help. Organize departmental and individual audit tasks with an online Gantt chart to get a clear view of your team's availability and progress. Download our free guide for a more in-depth look at the benefits of operational audits. Click here to claim yours today!
