Audit Trail: Why and How to

audit in procurement

What it is?

Think of an audit trail as a daily journal of everything you’ve done, including receipts for coffee, the discussions you’ve had at work with your boss and clients, and the work you’ve put into completing that important project. The audit trail is vital to any process which involves your operation’s finances and assets. In its most basic form, the audit trail is a record of all activities part of a specific operation, procedure or event your organization has been involved in. To boil it down even further, an audit trail represents the sequence of steps taken by your company’s departments between the start and end-point of a specific operation.

Why it is important?

Having a clear and detailed audit trail in procurement is not only vital to current operations, but also serve to create a framework for future interactions with suppliers ensuring that your purchases become increasingly efficient and check all boxes required for the growth of your operation.

Concretely, some of the main features which make a clear-cut and detailed audit trail a requirement for any successful procurement operation include:

  • It shows weaknesses and strong points in the procurement process, helping you focus efforts in future contracts;
  • It adds a layer of security for your company’s operations, as a clear audit trail shows who did what, when, and why;
  • It is needed to determine compliance with legal framework governing procurement operations;
  • It bestows transparency to those operations that could be subjected to official controls, saving you time and legal fees if and when such a control occurs;
  • It is a stripped down model of the entire procurement and administration process, serving to easily reconstruct it if need be.

How to do it?

Traditionally, the audit trail involves paper, and lots of it! Keeping a record of all operations, communications, requests, and contracts creates a paper trail which although needed for the above reasons, takes space, time to create, and can make auditing cumbersome.

Speaking of cumbersome, however, perhaps the main downside of the traditional paper-based audit trail is the difficulty which arises when you have to find a specific step in the procurement process, something you’d like to review from a previous operation or a report from a long time ago.

Human-error is also a component which comes into play when considering traditional audit trails, as certain records could be omitted by accident or improperly logged.

How to do it better?

Modern procurement platforms, with prokuria as a prime example of this, have moved towards electronic audit trails, thus preserving what is intrinsic to any efficient procurement process – a clear and comprehensive audit trail – , but removing the elements which make it difficult or costly time-wise to pinpoint specific stages in any past procurement operation.

With everything stored electronically in the cloud and every step of the process automatically logged, cutting-edge procurement platforms such as prokuria help your operation step confidently into the new age of procurement.

Alina

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