Purchasing Integral Operations Audit Service
The procurement and purchasing operation acts as the core of the operations in the supply chain in any organization. It is a highly technical field that takes up from 50 to 80% of the total cost of the operations in any business industry.
Procurement is not only the Professional activities of acquiring goods and services at a low price, best quality and time but is the efficient management of the supply chain and its documentation in order to attain the acquisition of goods and/or services at the best possible total cost of ownership including storage costs, insurance, freightage, taxes & administration cost, etc, in the right quantity, quality and time contributing to the Supplier development.
The purchasing department efficiency, effectiveness and economic behavior are critical, since there is a direct correlation to Costs Accounting, the Finances and health of the company.
Our Value Added Audit Service is based not only in our broad Technical, Functional and Professional Procurement and Supply Chain Knowledge but also is based in the use of International Procurement Strategies, Process and Statistical Tools
The Audit importance
The purchasing function it is always vulnerable to fraudulent transactions because it involves great amounts of cash disbursement. It is often to see unethical transactions from Purchasing agents, Superintendents and Area Supervisors who provide confidential information and price ranges engaging in special pricing with suppliers above of the normal cost of the product and/or service causing over-billing; some other unethical purchasing activities involve conflicts of Interests and even fictitious invoices.
The largest fraud opportunities in an organization are encountered at the Purchasing area.
The Procurement/Purchasing Integral Audit is one of our quality services which offer a Professional independent assessment of all the Administrative, Documental and Operational transactions in the Procurement area. The Audit offers an Analytical, Systematic and Objective Assessment; not only peruses the Internal and External processes but also identifies the level of honesty of the Purchasing Agents and Area Managers/Supervisors detecting fraudulent activities and detecting Cost reduction and Improvement opportunities.
It is recommended to have an Independent and objective evaluation at least once a year in order to have a healthy procurement operation, diminish the risks and improve the operation.
- Promote and Assure the Ethic, Honest and professional performance of the Purchasing Agents, Supervisors and Superintendents responsible for approving Contracts or Services
- Detect deviations from Company policies in Activities and Documentation (from Internal Documental Policies as to ISO 9000 / ISO 14000, etc., company Policies).
- Obtain an Objective, Professional and Independent Audit Report
- Detect Conflict of Interest
- Detect Conflict of Interest
- Detect Price Improvements Opportunities
- Improve Cash Flow
- Improve Company Revenue
- Increase Productivity
- Supports the Inventory Reduction and Obsolete Inventory reduction
- Eliminate Over-billing and special arrangements Suppliers-Purchasing agents
- Maximize the Efficiency in the Purchasing Department
- Minimize Purchasing Response time
- Improve Intradepartmental communication
- Eliminate Non-value-Added Activities
- Set up firm foundations for Supplier Development
- Improve affectivity of Procurement Control Operations
- Detect bottle necks
Some of our value-added opportunities & deliverables:
- Purchasing Audit Report (Determine whether the procedures, processes and documentation for procurement and contracting are in accordance with the Company (the client) policies)
- Findings of existence of unauthorized & fraudulent purchases
- Best Opportunities Available (better costs opportunities from sources)
- Professional and Independent information on the Purchasing agents Ethic and Efficiency
- List of waste activities and inefficiencies in the procurement process and Purchasing department
- Report of findings of invalid or missing Purchasing documentation according to Internal Policies
- Actual Process flow diagram vs Documented Process flow
- List of recommendations in policies and practices
- Reviewing compliance with purchasing's objectives, policies, and procedures
- Provide an Independent and objective evaluation of the procurement-purchasing operations
- Other deliverables not shown in this page
Some of our Goals in the Purchasing Audit
- Provide a professional, experimented and independent information to the Client-Company
- Provide an independent opinion about ethic, efficiency and effectiveness in the use of the funds of the company in the Procurement-Purchasing departments and life-cycle
- Detect unethical and fraudulent behavior activities
- Provide an Independent information on the Ethic and Efficiency of the Client`s Purchasing agents
- Recommend on cost opportunities (total cost of ownership)
- Improve the health of the cash-flow
- Offer Professional Analysis on Purchasing Agents Productivity and Efficiency levels
- Provide assurance to Executive management on equal opportunities given to suppliers
- Report the Purchasing level of compliance and Purchasing-supplier-evaluation compliance
- Other goals not shown in this page
Additional Services in Purchasing – Supply chain
- Supplier development
- Supplier Physical and Process Audits
- Supplier logistic and Remote Audit
- Supplier Evaluations
- Six Sigma Programs
- Search for additional sources
- Time and movement analysis
- Lead Time Analysis
- Five S Quality tool
- Kaizen Opportunities