Process Audit Reports – Create Efficiency and Procurement Excellence

Looking to improve operations and achieve cost savings within your procurement processes? Perhaps you already have a process audit report, or are interested in discovering how it could benefit you and streamline your operations.

Either way, here's some insight into how you can use a process audit report to your advantage, including a complementary process audit report template for you to get started within minutes.

What is the Purpose of a Process Audit Report?

A process audit report is designed to, ultimately, streamline processes, enhance decision-making and drive overall procurement excellence. It is typically conducted at planned intervals to determine whether the process is continuously meeting the requirements and so that performance can be communicated to management when necessary, but it is also designed to drive a culture of continuous improvements where teams move away from 'doing what they've always done' to striving to be better by making incremental improvements.

Effective auditing requires the auditor to identify and record audit trails, beginning with understanding how the process interacts with other process inputs, outputs, suppliers and customers. The outputs are then monitored and managed to ensure they are always fit for purpose. Typically, a procurement audit report will review areas such as the agreement of contracts, pricing data and purchase information, financial statements, stakeholder data and supplier performance records.

In our audit report template, we have included a process audit turtle diagram to cover the key areas an auditor should think about when approaching an audit, from equipment and facilities, to personnel and key performance indicators. If you're not sure you're asking yourself the right questions, this will spark some insight. 

We then provide a full audit checklist, split into process definition, process resources, process execution, process monitoring and process improvement, with a findings summary covering non-conformance, corrective action, preventive action and opportunity for improvement (OFI). This allows you to allocate roles for audit responsibilities, focus on any issues at hand, evaluate supplier relationships, and essentially review the entire procurement cycle. 

By completing this report with the auditor name, signature and date, it can then be revisited when needed to update and amend in line with business changes, ensuring continuous improvement is always front of mind.

7 Key Benefits of a Process Audit Report

Process audit reports are useful for procurement professionals for several reasons:

1. Increase Efficiency

Process audit reports help identify inefficiencies and bottlenecks in procurement processes by analyzing current processes and finding better opportunities to streamline workflows and optimize resource allocation. As a result, teams achieve greater productivity and efficiency.

2. Cost Savings

Often, there are hidden costs in business that can easily be missed without clear documentation. By assessing procurement processes and laying out areas of overspending or unnecessary expenses, you can discover where costs can be cut in order to improve financial performance across the organization.

3. Risk Mitigation

Audit reports help identify potential risks and vulnerabilities in procurement processes, including inadequate supplier screening, data security concerns or non-compliance with regulations. Monitoring these means potential threats can be mitigated before they amplify.

4. Supplier Management Optimization

Process audit reports are a great way to strengthen supplier relationships and negotiate better terms by evaluating the terms in which you work together. It can lead to better supplier selection and improved communication.

5. Performance Measurement

Using quantifiable data and metrics within a process audit report can help procurement professionals monitor progress, track improvements and evaluate any changes made. Building a culture of continuous improvement is vital to future-proof your procurement team for changing trends and best practices across the industry.

6. Strategic Decision-Making

Process audit reports are a great source of accurate information when making strategic decision-making, as they are essentially a pool of valuable data and analysis that you can dip in and out of when needed. It helps you prioritize specific initiatives, allocate resources effectively and identify key areas of improvement. 

7. Prevents Fraud

A procurement audit report is so comprehensive that it's impossible to overlook any signs of malpractice. This is why it's needed to ensure any red flags are monitored and dealt with before they breach safeguarding processes. Spotting these vulnerabilities can be crucial to spotting fraud before it's too late, ensuring the business upholds its integrity and reputation.

An extra benefit? Using the process audit report template means you'll save time on putting together a structure for the report yourself.

Get Started With Your Process Audit Report

Now that we're clear on the purpose and benefits of a process audit report, we can start to think about when is the right time to start using one. There certainly isn't a "best time of year" – you can start whenever. Ultimately, it will be when you decide that you need to seriously consider the efficiency, compliance and performance of your current procurement processes. It's when you're ready to make a strategic change.

We hope you can leverage the insights above to begin an audit report within your procurement function. Taking a proactive approach now means less work later down the line when you are asked to report on your responsibilities and processes, or need a historical trail of past events. It also fosters a culture of continuous improvement which optimizes your team for success.

At Skill Dynamics, we help procurement professionals, as well as supply chain teams, upskill for greater performance and efficiency based on personalized, role-based learning plans. Sharing our insight into core procurement skills is what we do, so why not download our process audit report template to get started.

Feel free to take a look at our Contract Management and Procurement Strategy training pages for more insight into our courses, which cover supplier audit activity and mitigating risk. Our team are available if you have any questions.