What is the main purpose of a procurement audit?
Audits are official inspections of a company’s accounts. Procurement audits ensure that procurement processes align with the company’s policies and procedures and are not corrupted in any way. Transactions are usually the main focus of audits.
Audits go through key indicators of procurement performance such as savings, compliance, timelines, etc., to gauge their efficiency. They can reveal which processes need to be fixed and which opportunities can be leveraged to cut down costs.
Similarly, audits keep a check on the external players of procurement as the process also includes going through contracts to see if vendors are following the terms and conditions of contracts. This is done to ensure compliance and let organizations determine which suppliers to replace.
The procurement department has to utilize a large portion of an organization’s revenue to procure goods and services, so inefficiencies create room for fraud. Audits track money trails to ensure no cash disappears from within the company, and the organization’s integrity is not compromised.
Audits require proper documentation for their successful execution. Organizations that deploy procurement software are at an advantage as advanced procurement solutions record audit trails digitally, ensuring that everything can be traced and central oversight can be maintained.
People also ask
- What is the difference between procurement and contract management?
- What is a PO and a Non-PO invoice?
- What is the difference between a sales invoice and a purchase invoice?
- What is source-to-pay?
- Purchase-to-pay vs. Procure-to-pay
- What are the examples of direct and indirect procurement?
- What is purchase order in accounting?
- Purchase order vs Invoice vs Receipt
- What is RFQ in procurement?
- How to automate invoice processing?
- What is a procurement policy?
- What are two advantages of the procurement integrated enterprise environment?
- What are the challenges in the procure-to-pay process?
- What is the difference between RFP and RFQ?
- How to implement centralized purchasing?
- What is the main purpose of a procurement audit?
- How to measure ROI in Procurement?
- What are the documents used in the procurement process?
- How do you keep track of all purchasing activities?
- How can procurement enhance business profitability?
- What is a procurement card?
- How to improve the procurement department?
- What are supply chain and procurement?