Procurement process audit

Audit of procurement activities is a complex and quite sensitive matter. The more organization acquires, the more significance of controlled procurement process increases. Insufficient attention to it and poorly regulated procedures can lead to enormous loss of profit and threaten the financial security of a company. The order and clear regulation of the procurement process can greatly reduce costs and minimize financial risks.

*Based on results of the customers’ survey of DELOVOY PROFIL Group

When the procurement audit is required

Such analysis of the procurement system can be required, if at least one of the following situations is observed:

• your organization has an established pool of suppliers without rotation or an extremely narrow pool of suppliers (except situations, when rare materials or services are purchased);
• suppliers charge inadequately low prices or, on the contrary, significantly high 
• prices compared to the market average, or you have no up-to-date information;— the final decision on suppliers’ selection is made by one person or by a group of people, which are not directly controlled by top management;
• you find out about the chosen supplier after the project has started;
• you do not see any objective reason for choosing a particular supplier;
• the task of suppliers’ and contractors’ selection in your company entirely lies with the owner or top management;
• the apparent objectivity of the selection procedure.

We regularly notice such situations during the analysis of the tender process. The audit allows you to identify and neutralize financial risks, as well as increase the transparency of the process.

The process of procurement audit

Audit of the procurement system is a necessary measure to ensure the sustainable functioning of the company. Particularly, it includes the following steps:

• audit of the suppliers’ selection process and preparation of recommendations for its modification;
• development of the supplier selection process regulations, including the tools and processes for their evaluation and selection;
• Inventory and detection of the negative schemes, which have an impact on the financial result and costs of incoming materials and products;
• automation of the specified and related processes.

DELOVOY PROFIL Group experts’ approach to the projects’ implementation in the field of procurement audit includes the following procedures:

• Сase study of contracts in different segments, competitive procurement, formulation of recommendations;
• Audit of the procurement process – analysis of control points, transmitted information, ways of communication with suppliers and selection channels;
• Development of the final documentation and automation.

Result of the procurement process audit

• A well-functioning managed business process that ensures transparency of controls with detailed instructions to staff;
• A clear procedure for tendering and the suppliers’ selection process with criteria that ensures the most efficient and safe selection process;
• Minimization of financial and fraud risks in the procurement process.

Procurement process automation

Implementation of digital solutions to the procurement processes leads to decrease of time consumption and expenditures as well as ensures reliability and increases the quality of supplier management.

DELOVOY PROFIL Group’s specialists offer efficient solutions for modernization and improvement of the procurement process. It is possible to automize only separate parts of the process or to implement fully automate process, to use existing packaged software solutions or to develop a customized solution.

IT specialists of Management consulting will ensure:

• development of process automation concept and terms of reference preparation;
• selection of the most efficient solution for process digitalization or development of customized one;
• implementation of automated business-process with the synchronous training of employees