Conducting an internal audit of your business is one of the best ways to pinpoint problems, discover new opportunities, and pave the way for future growth. While you should already be assessing your business’s strengths and weaknesses on a daily basis, semi-formal auditing will give you the organizational framework necessary to really figure out what’s going on. The more you know about your business’s operations, the better you’ll be able to build for further growth. After all, the best business decisions are always informed decisions.
With so much to audit and limited time, it’s best to begin the process with certain areas in mind. Here are four places to focus your initial auditing efforts.
Finances
Understanding your business’s finances will tell you how and where you can afford to invest in a comprehensive growth strategy. The first step when auditing your finances is to collect all your business’s financial records. Then, use these documents to determine the financial standing of your business. Specific figures worth considering include cash flow, debt, revenue, and costs of goods sold. It’s also worth reviewing how your payroll and accounting software systems are working so you can decide if they need to be upgraded or changed.
Supply Chain
Your supply chain is what keeps your business fully stocked with the essential goods and materials it needs to function. Taking a hard look at where you source products and materials can make your business more profitable and resilient. Assess your vendors to see if they’re reliable and whether their prices are still competitive. Investigate your business’s internal processes to determine whether you’re accessing goods as efficiently as possible. Take a look at the technology you use for sourcing and inventory to see if it’s meeting your needs. Cutting costs throughout the process will allow you to boost your profits and set lower prices. Increasing your range of suppliers, meanwhile, will make it easier to survive supply chain disruptions.
Workflows
Your business is probably full of hustle and bustle, but it’s important to make sure that all this hard work is actually transformed into productivity. Try sketching out diagrams of key internal workflows so you can see if they’re as efficient as they could be. Write down the technologies and personnel needed for various tasks. Sit down and talk to your employees, many of whom have seen where the workflow needs improvement. These simple steps will go a long way toward boosting productivity.
Human Resources
Brainpower is often a business’s most powerful resource, so you want to be sure you’re maximizing its potential. Investigate exactly how hiring decisions are made. Conduct surveys to see how your workforce feels about its position in the company. Collect data on retention levels so you know how people are responding to your business’s policies. All of this information could inform changes to your benefits packages, payscales, and hiring practices, all of which have a direct effect on employee satisfaction and, ultimately, productivity.
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