Business Process Audit: How to Implement & Improve It

By
Rahul Roy
December 28, 2022
min read
Updated
September 19, 2023
Photo credit
A business process audit is done to ensure that all the business activities are running smoothly, and it also reveals the faults in the process which need to be fixed.
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Introduction

A business process audit is like a wake-up call for the management, so they can see if they're doing things right.

In today's world, auditing has become crucial for organizations. To stay ahead in the competition, companies need to make sure they meet internal and external expectations.

After all, how can you improve if you don't know what you're missing?

What is a business process audit?

A business process audit is a thorough check-up of how things are running in a company. It involves examining all the different tasks, procedures, and operations to see whether they're working well.

The purpose of a business process audit is to figure out what's going right and what needs improvement.

It helps a company make sure it's doing things efficiently and following the rules. By looking at how the business operates, the audit can identify areas where changes can be made to make things better. 

The audit involves talking to people, looking at documents, and watching how things are done. It helps the company understand where it's doing well and where it can do better. The findings from the audit can be used to make decisions and make changes that will make the company work smarter and deliver better results to its customers.

🎓 Related resource: What is a Business Process?

Goals & standards of a business process audit?

A business process audit is a healthy step in the business process management lifecycle. Some of the goals, objectives, and standards are: 

  • Encouraging the continuous process improvement of the business. 
  • Helping in eliminating anomalies. 
  • Enabling risk control and keeping information secure.
  • Standardizing the process culture within the company. 
  • Facilitating the proper training sessions for the employees. 
  • Improving transparency. 
  • Increasing efficiency of your business operating system.

Steps to take to implement your business process audit?

As we know, a business process audit is a series of steps that need to be followed to analyze an organization's working and other business activities.

The process is an essential element within the business. Usually, an auditor has the responsibility to carry out the process audit, but in the absence, any employee who knows all about audit and has access to the entire process can audit the business.

Here are the steps involved in the business process audit. 

1. Organize the data 

To organize the data, you are required to visit the organization in a particular time frame when there remain lots of employees. The best time frame will be the working hour of an organization. This time frame will help you get enough sample data.

It's best to audit in a specific time frame to get various meaningful data and insights to work with. 

The auditor must organize their data based on the following metrics: 

  • Several errors and reworks. 
  • List of most common human errors. 
  • Average cycle time. 
  • Employees are unattended, pending requests, and several are in progress. 
  • The ratio of approved to rejected ones. 

Other than this, you can also use qualitative data for auditing the process by considering the feedback of stakeholders. This information can be gathered by contacting employees who are working on projects very closely. Once collected all the data, organize them to know the areas of improvement. 

2. Analyze the process 

By analyzing the cycle time, you will get to know the basic ideas and rough sketches of how fast and productive the process functions.

Moreover, you will also get an overall idea of how each step of the process audit helps. With the cycle time, you can analyze the health of the business. For example, if this cycle time is low, the process is in good form, whereas if it is high, some actions are required to be taken to bring it down.

Another metric one can use is to identify the errors. It is an essential element of a business process.

When the frequency of errors is high at a certain point, you can know from where the fault is being initiated. The error can happen due to manual entries or due to wrong interpretations.

However, if there is a system-based error, you can correct the error by installing a new software tool. And if it is a human error, train your employees to take up the responsible task and work efficiently and correctly on it. 

🎓 Related resource: Do You Need a Business Process Consultant? Things to Consider.

In addition to these, you must also see that all the steps have the least processing time by using automation in the business process.

Digitization and automation are very important to increase the workflow of the business.

Moreover, lost and unattended requests must be ideally zero. Loss of request mainly happens due to poor tracking of data, and the request remains unattended due to delays in the decision. So, you can make use of different tools that can handle the request very easily and quickly. 

If the requests are kept in progress, then they must be handled by the stakeholders frequently. When the request number is too high, it needs to be figured out immediately to bring down the number of requests. Furthermore, if the ratio of approved to rejected requests are more than, stakeholders must be informed through automated email notifications once the request is satisfied. 

3. Alter the process with the required steps

After identifying and analyzing the issues, you can categorize the errors and correct them by issuing new processes or making valuable changes. Before making any changes in the process, you must inform everyone in the upper, lower, or middle management of desired changes and the reason behind them. 

So that they can understand the need for changes, and in the future, the errors can be avoided easily. Once altered, you must see whether it is performing per your expectations. You must also introduce all the members to the changes in small iterations and make everyone comfortable with the new process. 

How to measure the success of your audit? 

The success of auditing by various ways of measuring performance indicates whether you are using the best audit strategy, execution, and reporting or not. 

Here are some ways by which you can measure the success of your audit in the business process. 

Assess your performance

The reviewing of the management expectation and its achievement helps to determine the performance of any business process audit. By assessing your performance, you can identify what things you have achieved and what remains to be achieved. 

Performances can also be assessed by measuring the effectiveness of the audit in specific key areas, getting feedback on audit findings, measuring the durations of the audit, evaluating the accuracy of audit findings, and evaluating the value added by the audit function in the business process. 

Keep track of performances

It is good to keep track of the auditing functions in the business process. By keeping track of performances, you can know the number of cases completed upon the number of cases pending. Also, with every completed request, you can set a benchmark for future work. 

Measure customer satisfaction

Customer satisfaction is an essential part of any business process audit. If the customer is satisfied, it indicates the increased productivity and efficiency of the business.

How to improve your business processes post audit

It's easy to list the attributes of business processes, but assessing how much it is truly applicable in practice is equally important.

After auditing your business process, you must follow certain things to maintain and improve your business process post-audit. 

Create an auditing team

Make a team of a few employees and assign them the responsibility of evaluating the process within the key areas of the business. This way, even after the audit, you will be able to maintain the efficiency and workflow of the business. The team must have the appropriate knowledge of the auditing process and must not be partial to anyone. 

Develop an action plan

Once you've created a team, gather the information, data and evidence to discuss an effective action plan with them.

Implement the action plan

When your team is ready and has developed a proper action plan, you must implement the refined process in the business. Auditors must see that all the actions are implemented correctly, and all the employees are familiar with the new system to avoid any future issues. Narrate the rules, regulations, and infrastructures to the members so that they can adhere to the new working practices easily. 

Conclusion 

These are the things that we must understand about the business process audit. With all the information gathered, organize the data, make a report, and present them to company managers. Elaborate on the action plan with required changes and improvements. This way, you will be able to track the audit system properly and improve the business processes even after the post-audit.

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