Purchasing Audit Advisory

Purchasing Strategy - Expense Analysis - Supplier Development - SRM - Strategy by Category - PPV Administration - Cost Reduction

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Procurement Operations Audit

Procurement and purchasing operations act as the main core of supply chain operations in any organization. It is a highly technical field that involves between 50 to 80% of the total cost of operations in any 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.

Purchasing Audit Flow - End to End

The effectiveness, efficiency and economic behavior of the Purchasing department are critical points because there is a direct correlation with Cost Accounting, Finance and the health of the company.

Our service is based on a detailed Value Added Audit plan using not only the extensive technical, functional and Professional knowledge of our consultants but also using International Purchasing strategies, statistical and process tools.

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The Importance of Purchasing Audit

The Purchasing-Procurement Function is always vulnerable to fraudulent transactions because it involves highly important economic transactions. It is common to find unethical transactions by purchasing agents and superintendents or Heads of Areas who provide confidential information and price ranges, receive direct benefits and engage in special prices above cost, with the company's suppliers causing overbilling; some other unethical purchasing activities involve conflicts of interest, fictitious invoices and corrupt actions.

The greatest opportunities for Fraud within an organization are located in the area of purchases and acquisitions.

The Comprehensive Purchasing Audit Service is one of our professional services that provides an independent assessment of all Administrative, Operational and Procurement Documentary operations, in an Analytical, Systematic and Objective manner. It not only reviews the internal and external processes but also the level of honesty of the Purchasing Agents and Heads / Superintendents of Areas detecting fraudulent activities and thus also detecting Opportunities for Cost Reduction and Opportunities for Improvement.

It is recommended that an Independent and Objective Evaluation be carried out at least once a year in order to have a healthy Procurement operation, reducing risk and improving the operation.

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Benefits of the Audit

• 1.- Promotes and Ensures the Ethical, Professional and Honest performance of the Purchasing Professionals, leaders and Heads of Area responsible for the Approval Process;
• 2.- Detects deviations in Activities / Transactions and Purchasing Documentation, from Internal Documentation Policies as ISO 9000 / ISO 14000 Policies, etc.;
• 3.- Obtains an Objective, Professional and Independent Audit Result;
• 4.- Detect Conflicts of Interest;
• 5.- Accelerates purchase and procure to pay processes;
• 6.- Detect Price Improvement Opportunities;
• 7.- Increase Productivity;
• 8.- Provides a solid foundation for improved communication;
• 9.- Supports the reduction of Inventory and Obsolete Inventory;
• 10.- Improve Cash Flow;
• 11.- Improves company profit;
• 12.- Eliminate Overbilling and non-ethical arrangements between Suppliers-Purchasing Agents;
• 13.- Increase efficiency of purchasing department;
• 14.- Minimize Purchase Response Time (Intradepartmental);
• 15.- Improves department communication with Warehouse, Production, Maintenance, Logistics, Management, etc.;
• 16.- Eliminate Activities that do not add value in the Acquisitions / Purchases operation;
• 17.- Build a firm foundation for Supplier Development;
• 18.- Improves the effectiveness of the Operational control in Acquisitions / Purchases;
• 19.- Detects bottlenecks that affect the operation;

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Some of our Value-Added deliverables:

• A.- Procurement Audit Report (Determine if the procedures, processes and documentation for the procurement, purchasing and contracts process are in accordance with the policies of the Company (the client).
• B.- Audited results of the existence of unauthorized or fraudulent purchases.
• C.- Market Availability for cost reduction opportunities.
• D.- Independent Report of level of ethics of purchasing professionals.
• E.- List of activities that do not add value and inefficiencies in the purchasing process and procurement department.
• F.- Findings of Invalid or missing documentation in purchase transactions according to rules and internal policies.
• G.- Flowchart As Is or Actual Process vs Documented;
• H.- List of recommendations in practices and policies.
• I.- Compliance review of purchasing objectives, policies and procedures;
• J.- Independent and objective evaluation of acquisitions and purchases operations.
• K.- Other deliverables not shown on this page.

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Some of our objectives within the Purchasing Audit

• Provide professional, experienced and Independent information to the Company-client;
• Provide an independent opinion on the ethics, efficiency and effectiveness regarding the proper use of company funds in the purchasing department procure-to-pay cycle;
• Detect unethical or fraudulent activities;
• Provide Independent Information regarding the Ethics and Efficiency of purchasing agents;
• Recommendations on cost-reduction opportunities (total acquisition cost);
• Improve cash flow;
• Provide security to the Senior Management of Non-Fraudulent, Ethical and Healthy Purchases with equal opportunities for suppliers;
• Report the level of Purchasing Compliance as well as Compliance to the Evaluation of Suppliers;
• Other Objectives not shown on this page.

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Additional Services for the Supply Chain

• Audits of Suppliers' Facilities and Processes
• Analysis of Six Sigma Quality Improvement Programs
• e-RFI | e-RFP | e-RFQ | e-Auction
• e-Procurement
• Lean Procurement Execution
• Purchasing Outsourcing
• Remote audits to logistics and Suppliers
• Search for price improvements and optional providers
• Suppliers Evaluation
• Suppliers Development
• Time and Motion studies to SCM
• Total Delivery Time Analysis (Lead Time)

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ConsultandAudits is an authorized Reseller, Provider and Distributor of Promena e-Procurement, e-Sourcing Software and AviX Times and Motion Software in Mexico, the United States, Canada and Latin America

For more information about our Software Promena e-Procurement Click here

For more information about Our AviX Industrial Engineering Software Click here