SOPs

Business Process Audit: How to Implement & Improve It

A business process audit ensures all business activities are running smoothly, and reveals the faults in the process which need to be fixed.

Introduction

A business process audit is like a warning to the administration that it is not doing its work correctly.

If required, the auditors can take action to guarantee that the company is doing the right work.

In today's world, the auditing process has become a vital part of the organization. To remain competitive with the competition, companies must ensure that they deliver the expected result to their customers. This helps them build customer satisfaction and business sustainability. 

What is a business process audit?

A Business process audit is a technical and formal technique to inspect and derive the impression of other companies and see if the company is managing or following its business processes well or not. These things are determined by analyzing their business goals, strategic objectives, and suitable procedures. 

The business is found to be working smoothly when the performance of business processes is within the expected norms. Business owners must find controls suitable in order to measure the correct business processes. Also, the procedure they use must be effective and efficient enough to gain desired results. 

Goals & standards of a business process audit?

The business process audit is of much use to any company or organization. There are numerous goals and standards to do auditing in any business. Some of the goals, objectives, and standards are: 

  • It encourages the continuous process improvement of the business. 
  • Helps in eliminating anomalies. 
  • Enables risk control. 
  • To see whether the goals or objectives set by senior management are being followed by the team or not. 
  • Ensures best management techniques. 
  • Make use of IT resources assessment. 
  • Different suggestions for improvements. 
  • Standardizing the process culture within the company. 
  • Gather more data to help leaders make their decisions. 
  • Facilitates the proper training sessions for the employees. 
  • Keeps information safe and secure. 
  • Increases productivity of the team. 
  • Adequacy of structural and physical resources for the working. 
  • Improves transparency. 

Steps to take to implement your business process audit?

As we know, a business process audit is a series of steps that are needed to be followed to analyze the working and other business activities in an organization. The process is a very necessary 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 is not a good solution to conduct audits frequently based on your convenience. But it's good to audit in a specific time frame and 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 taking the feedback of stakeholders into consideration. 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. 

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 by making valuable changes in the process. Before making any changes in the process, you must inform everyone in the upper management, the lower management, or the 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 as per your expectations or not. 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, efficiency, and working of the business. 

How to improve your business processes post audit

It is easy to list the attributes of business processes, but it is equally important to assess how much it is truly applicable in practice. After auditing your business process, you are required to follow certain things in order 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 have created a team, you are required to gather the information, data, and evidence and have a meeting with your internal auditing team to discuss the effective action plan with them. You can make use of Scribe and Scribe pages plug to develop and maintain the action plan. Scribe automatically creates step-by-step guides, adds screenshots and instructions, and customizes things to ease the business process. 

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 so that they can avoid any uncertain issues in the future. 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.