Many companies still employ audit staff in the traditional way. They advertise the position online, in a classified ad, by word of mouth, accept applications, go through a lengthy interview process, choose the individual best suited to the job, train them and trust they will always tell it like it is – even when it compromises their colleagues and their own position. This process is not only time consuming, but it can be foolhardy and expensive.
Outsourcing basically means asking a third party vendor to work for you on a contractual basis. Traditionally companies outsource primarily to cut costs but it is not only about cutting costs. It is also about reaping the benefits of strategic outsourcing such as accessing skilled expertise, reducing overhead, flexible staffing and increasing efficiency, reducing turnaround and ultimately generating more profit.
Outsourcing all of your stocktaking or at least part of your audit process puts the reins in the hands of experienced, independent experts, whose sole aim is to provide accurate information, reporting and coaching so as to help you and your team improve profitability and control, saving you time and money. If they aren’t then your are using the wrong provider.
Cost containment, the need to focus on core business operations and independent, expert analysis, are at the top of the list of common reasons to outsource audit functions.
Other reasons employers choose to outsource their audit requirements include: a need to improve their audit processes; control rapid growth, seasonality or decline; and develop competitive advantage.
1. Reduce Costs
In a volatile economy, reducing costs rises to the top of the to-do list quickly. Besides direct labour costs, the costs related to recruiting, training, keeping staff engaged and aware of best practice and the related technology is expensive. However, these costs are all rolled into one relatively low investment when you outsource your audit needs.
Cost-per-hire is often reduced along with time-to-hire because you have a dedicate resource on hand whenever you need it (but not necessarily day in day out). Other ways costs are reduced through outsourcing audit needs include shared risk and streamlined processes. Passing the responsibility of expanding or shrinking staffing needs to a dedicated outsourced provider eliminates employing unnecessary staff or being short staffed when business spikes.
2. Focus on Core Business
Often audit tasks and related activities are outside of the core business functions and take resources from core business operations. When stocktaking is outsourced to audit specialists, it doesn’t take anything away from core business activities and provides an independent analysis of the business without distracting business operations.
Operations staff with stocktaking responsibilities can quickly become overwhelmed and unable to focus on their core responsibilities. When this happens, it can have a ripple effect, interfering with productivity and workflows and their ability to service your all-important customers.
3. Improve Stocktaking and Auditing Effectiveness
Not everyone is in the stocktaking and auditing business and even though many companies have some sort of audit function, sometimes they need further resource for a particular problem or project which could take away from a business’ core.
Others want a truly independent view at least once or twice a year to satisfy their Board, their investors and contributors. Here, outsourced auditing can help them by allowing a provider to do what they do best without taking away from what the Audit Manager or the rest of the company does best.
For many, it proves difficult to achieve the necessary process improvements with existing staff. Furthermore, with an improving economy, competitive job market and an ongoing skills shortage, it’s difficult for many companies to find, employ and train the right people for your core business let alone your audit function.
When you outsource auditing to a professional firm, you should benefit from that firm’s ability to engage, train and employ the best people in that field and realize a more efficient use of resources.
4. Flexibility – Rapid Growth, Decline and Seasonality
Companies experiencing rapid growth or seasonal spikes find it difficult to meet staffing needs and often outsource their auditing to better control fluctuating activity in their business.
Seasonal auditing, periods of rapid growth and expansion or indeed even contraction, can strain existing staff and make effective in-house auditing a huge challenge. Professional outsourcing firms eradicate the need to employ such staff along with all of the associated fixed costs. They can provide dedicated, fully trained experienced experts, educated in the latest technology and best practice to meet your fluctuating needs.
In times of contraction they may even alleviate your redundancies by undertaking TUPE as Venners has done on numerous occasions, over the years.
5. Competitive Advantage
Like large companies, small companies and start-ups that don’t have the resources or want to commit to the fixed costs associated with them, can become more competitive when they outsource their audit needs.
A professional auditing firm can more quickly and efficiently help small or larger companies with due diligence and compliance so that they get up to speed quickly and are able to compete and often outperform larger companies with more resources.
6. Better Risk Management
Outsourcing allows you to share any associated risks with your outsourcing partners thereby reducing your burden. For example, by outsourcing to a competent outsourcing partner you reduce the risk involved in having the same task done in-house by staff that may not be as competent in that field.
Benchmarking is the process of comparing one’s business processes and performance metrics to industry bests or best practices. This allows organizations to develop plans on how to make improvements or adapt specific best practices, to improve performance. Benchmarking may be a one-off event, but is often treated as a continuous process in which organizations continually seek to improve their practices.
8. Troubleshooting & Problem Solving
In addition to all of the above, when companies decide to outsource stocktaking or auditing it’s often in direct response to a specific business need. Perhaps they are the victims of major theft or fraud, they are struggling to integrate a new (EPoS) system or the EHO has issued a warning or given them an unfavourable rating. Perhaps they know they have a problem but they are not sure exactly what it is or how to solve it or they are simply looking to improve their business overall. Often trying to come to terms with these kind of things are the catalyst for change.
As much stocktaking and auditing are necessary and beneficial they won’t solve all you operational issues nor devise an in-depth plan to improve. However Venners Consulting will. Their consultants are seasoned professionals with in-depth industry experience and knowledge backed by leading services, data analysis and reporting. They are capable of quickly troubleshooting the most technical of matters primarily, although not exclusively, within any food & beverage operation to deliver true profit enhancing output.
9. Talent on Tap
Professional auditing firms dedicate time and resources to sourcing, engaging, contacting, hiring, and training talent.
Companies can better focus on their core business operations when they are well-staffed with qualified, engaged employees. Outsourcing stocktaking and auditing allows companies to meet their recruiting needs without causing other business problems.
10. Increase in-house efficiency
After you allocate tasks to your outsourcing partner, they share the workload of your employees. This allows you to develop your internal task force and use them more efficiently.