December 17, 2020

4 Ways to Simplify Your Audit Process

Author: Stockpile Reports

Audit season is just around the corner, which can inspire dread and apprehension even in the well-prepared. We find that it helps to see auditing as critical and even beneficial. A smooth audit process can help you identify growing problems and solve them out before they snowball out of control. Experts say the $22 trillion 2008 financial crisis could have been avoided with more transparency and a better auditing process!

Ideally, you should start preparing for the year-end audit as soon as the previous one ends. Auditing is a constant, long-term endeavor. Throughout the year, Stockpile Reports can help prepare you for your year-end audit by:

1. Helping you avoid surprises in your perpetual inventory

What you have on hand rarely matches what’s noted in your books. You may have ordered an X amount of inventory and recorded it that way, but the supplier may have delivered Y amounts instead. Other factors will affect the volume of your inventory and cause the levels to fluctuate. For example, floor loss, spillage, deterioration, and theft. Finally, if you measure your inventory with machines and belt scales, the calibration levels will change over time. This means the amount of material you have on hand will change drastically, causing write-offs and discrepancies in your financials.

SR allows you to avoid surprises in your perpetual inventory through instant, accurate measurements. You can measure any stockpile you have on hand and correct any errors reliably.

2. Getting your production tallies under control

When you produce more than you need, the excess inventory just sits around, occupying space and driving up your expenses. It can also become obsolete or end up resulting in a write-off or loss. When you produce less than what you need, your business processes will stall. Your customers and vendors will never receive their orders or they’ll receive them late. In both cases, your business will have to deal with write-offs. You may not make the revenue you were expecting to make.

With SR, you can accurately predict how much you have produced and how much you still need to produce. It’s all exact amounts that you can record and accurately audit later.

3. Automating data collection

Most companies have quarterly audits. They hire surveying teams, shut shop for a couple of days, and then measuring their inventories with the help of equipment like lasers, man lifts, and belt scales. Needless to say, this process is expensive, time-consuming, and cumbersome. It’s also somewhat dangerous and requires a significant amount of investment in manual labor.

With SR, you can automate data collection for your audit process and speed things along. You can use a system of fixed cameras, drones, and an iPhone app to almost completely automate data collection.

4. Measuring more frequently to avoid and correct errors early

The less frequently you measure, the more errors that tend to creep in. Multiple factors affect the volume of your inventory, as we mentioned before. Some examples are non-static conversion rates, belt scales losing calibration over time, disappearing materials due to floor loss and spillage, theft, misplaced materials, inconsistent delivery amounts, inventory becoming obsolete, and much more.

With frequent measurements, you can catch errors early and make sure they don’t hold up your audit process or throw the numbers far off track. You can measure frequently or even on-demand with SR.

During your audit, Stockpile Reports supports your team by:

Meeting with your audit team to ensure their questions are answered

SR’s team of professionals will be on hand during your seasonal audit. If the audit team requires assistance with measurements or just needs questions answered, they can direct them to SR. We will help the audit team double-check its figures, comment on the accuracy of the data, and provide information on how our software works and how we collect and process inventory information. Some of the details are quite technical and are best answered by an expert from our end.

Collecting any data that they need to complete the audit

Have you accidentally overlooked any inventory piles for the audit? Are there discrepancies between what’s on record and what’s actually there? SR will help you spot-check piles in a jiffy. We can have a drone – yours or ours – up in the air and have an accurate report in the auditors’ hands in an hour. Further, we can use our app to simply point an iPhone at any stockpile, walk around it, and provide an accurate, in-depth volume report instantly.

Verifying everything with an audit trail

Every piece of data SR collects is time-stamped, dated, and geo-tagged. Further, it cannot be modified or tampered with. The information is accessible to the auditors through our dashboard, which allows them to ensure everything is genuine and aboveboard. Essentially, our system is third-party compliant. Finally, all the data you collect with our help is organized into a central information repository. You and your team will have to spend less time gathering documents from department to department.

Conclusion

We provide an unprecedented level of insights into your inventory data that no other company does. We are third-party compliant and we are trusted by the major audit firms in the US. We help you prepare all year so you are ready and there aren’t any surprises. Don’t decide to start training for a marathon the day before you are supposed to run it. Prepare all year – and win!