One of the things that secure the success of a company is the review and evaluation of ongoing projects. However, it isn’t just about evaluating what is going on and how things are being handled in the company. More important, it is about security and transparency in a company’s procurement department.
Audit security and transparency
In general, audit security and transparency is the process of reviewing contracts or any related contracting process in the company, but under the verification of a different team/department. Also, the auditing can be done on an online tool to let all the relevant parties to view the process and prevent loss of information. This is also known as audit safe filing {it prevents the online stored information from being lost}.
The purchase department
The procurement team of the organization is also responsible when it comes to audit security and transparency. There can be a lot of challenges that face the procurement department during the audit process. For instance, there can be rigging of bids, false invoices, or any other related fraud in the organization. However, the purchase department is required to play their part and prevent any fraud in the audit process:
Specify the Statement of Work/Avoiding Maverick Spending
Too many times, there might be an increase in the price, which is adjusted by the suppliers. If the initial contract states that goods should be supplied at a specific rate or in a certain frequency, it must be followed at all times. However, if there is any of the purchasing team buys the goods without following the pre-established rules, it will be defined as maverick spending. They may even buy goods at a higher price without minding the rules.
To solve this, the purchase team needs to specify the Statement of Work as well as define the Terms and Conditions of supply. This will help to ensure a fixed price in the future, which will prevent any unexpected change of price or breaching of the procurement policy.
Follow up the projects’ process/Employees’ feedback
You want to ensure that you get proper feedback from the employees. Your employees know each other, and they also know the suppliers. So if any of your employees approach you about any fraudulent activity either by a fellow employee or a supplier, you must follow it up immediately.
Following up the process of the projects or the feedback of the employee helps to avoid any possible fraud in the future.
Communicate frequently with your suppliers and purchasing team/Promote Digital Archiving
When there is limited communication with the suppliers, there might be a possible fraud. There shouldn’t be just one person communicating with the supplier. For instance, if one purchase specialist makes an error, they might hide it from the procurement team. However, if the entire team is informed about the supplier’s activities and contracts, there won’t be any fraudulent activity.
Ideally, you can use an online tool, which allows the relevant parties to access it and view all the ongoing communication between the purchasing team and the supplier. The online purchasing tool will promote digital archiving, where all the necessary procurement details are stored. The audit records stored on the online tool can never be lost or damaged.
Replace the unnecessary suppliers
In some cases, you might be dealing with a supplier that delivers poor-quality goods to your company. A good way to avoid such is to vet the supplier or service provider before you sign a contract with them. Ensure that the service provider/supplier proves that they can deliver top quality products to your company. Furthermore, the quality of the products must be consistent. You don’t want to have high-quality products supplied in the first month, only for it to change in the third month.
Take home message
When the procurement department plays its part in ensuring there is security and transparency in all the audit process, it will assure the company of success and limited errors/fraud. A good purchasing and procurement tool will help to promote the security and transparency of the audit process in a company. Make sure you choose one that suits your business niche.
To learn more about purchasing events and meetings have a look at the MICE Portal Whitepaper. It gives you insights about the digital transformation of the MICE Market and how to handle it. Download your copy here:
