Many large businesses have optimisation officers and improvement managers, who regularly conduct internal audits. Their evaluations look for ways to improve productivity and customer service, reduce costs, and make the best use of company resources.
As a business, it’s vital that you perform regular audits to determine whether your business is operating at peak efficiency. Ongoing system development is the key to continuous learning, growth, and improvement of individuals and organizations. Regular internal audits are important, but what sets successful businesses apart is undertaking external audits too.
An external audit is an audit conducted by an independent company or firm that has no connection to your business. There are several important advantages of having an audit conducted by an independent company or individual.
1. ALLOWS FOR FRESH EYES AND A DIFFERENT APPROACH
When I was at school, even after checking my essays countless times for spelling errors, I still got someone to proofread my work before submitting it. Too many times they spotted glaring mistakes that I overlooked all those times of reading it myself.
While these errors may have resulted in the deduction of a mark or two for poor grammar or incorrect spelling, in a business context the implications are significantly greater. A fresh pair of eyes can spot unseen errors or provide new perspectives and ways of thinking that offer alternatives to your day to day business practices.
2. ALLOWS SPECIFIC INDUSTRY EXPERTISE
Another factor that confirms the importance of independence in auditing is that, in many instances, internal auditors are not specialised in all parts of your business. For example, some internal auditors might not have enough procurement experience to be an expert in it. By using an external company, you can choose someone who is an expert in the area that needs investigating. They can ask the right questions and focus on common problems. They can ensure that the internal audits are comprehensive, accurate and reflective of your company’s true potential. It could also be possible for external auditors to also train your internal auditors in how to improve their audits by explaining how the way they investigate differs from the internal auditor.
3. ALLOWS CRITIQUE OF YOUR INTERNAL PROCESSES
The importance of independence in auditing also includes the fact that internal auditors might not effectively critique your company’s internal processes because they are part of your company. External auditors, however, can observe operations with a steely-eyed gaze and determine in which areas your business is wasting time and money. External auditors are not afraid to critique practices and general operations and can develop an action plan for you to reduce waste and implement strategies for greater efficiency.
4. ALLOWS UTILISATION OF BEST PRACTICE FROM OTHERS
Choosing an external expert to give you advice means you can draw on their knowledge of other businesses. They no doubt have other clients like you and have seen the good and bad of how they run their operations. They will be equipped with ideas you have never even thought of. They will also likely be able to connect you with another person or company who will be able to help solve any problems you might be facing.
5. ALLOWS SMOOTH IMPLEMENTATION
In many instances, organisations come up with great ideas about how to improve their business performance. Often the ideas are not implemented because they are untested, raising concerns about whether they will be successful. Change can be risky and costly if not implemented well. However, by consulting an expert that has a wealth of experience, you can draw on their success and what they’ve seen in a range of different businesses. They are best placed to warn the client of the potential problems they may face and put in place processes to avoid them.
Now is the time to start organising your next external audit. PrintDATA has worked with many production companies across Australia and can use our knowledge of the industry to help your business develop, pivot or improve. Read more about our free site assessments here.