Benefits Of Outsourcing Your Vendor Audit

Benefits Of Outsourcing Your Vendor Audit

When it comes to vendors, a company must be diligent with the auditing process as you are literally trusting and forming relationships with third-party vendors. Organisations these days rely on vendors for a lot of the services and/or products provided to their clients and if some things go south, the organisation will be held accountable.

A vendor audit is carried out for an organisation to get an impartial evaluation of the vendor’s conformity with contractual agreements or terms and conditions discussed between the two parties. Audits of vendors can be used to cut costs and enhance quality assurance.

A vendor audit can include elements such as vendor efficiency, management process, capability and information security amongst many other.

What Does Outsourcing Mean?

Outsourcing means hiring another company to perform audits of your vendors on your behalf. It means that you won’t have to take time out of your busy schedule, cancel meetings, and physically go somewhere. An outsourcing company will do all that for you and hand over the report.

Let’s discuss some of the benefits of outsourcing the vendor audits and provide you with information to choose the best option for your organisation.

Outsourced Vendor Audit Saves You Money and Time

You may think how outsourcing a vendor audit can save you money when you can send one of your employees for free. Let’s clear it out. Third-party auditor charges may seem a lot at first, but it is clearly cheaper than sending one of your staff members to perform the audit.

Now, when sending someone from your staff to audit a vendor, they don’t just have to go to the vendor site for a chat; it takes a lot more effort and time than that. There is all the preparation in the preliminary phase, such as developing agendas, audit plans, receiving and evaluating past audit reports, contracts, specifications and relevant industry standards amongst other information. For the actual audit, the time it takes to go to and from the auditing site should also be considered, as well as time and cost for training auditors.

Following the audit, the activities continue with writing up the audit report, follow up on findings and evaluate responses and corrective actions. During all this time your key employees will be unable to address their day-to-day tasks which perhaps are piling up and increase job pressure and stress.

Provides More Consistency

Because most vendor auditors within organisations undertake audits as a side job, or they are requested to carry out the audits, they typically aren’t conducted very consistent. The duration they get to conduct an audit and prepare a report might vary depending on their other on-job duties. When an auditor is pressed for time, they will most likely produce a brief and generic report. Furthermore, the competence of the auditors may differ depending on their expertise and knowledge.

Experienced vendor auditors are qualified to provide the degree of information and accuracy you demand from them as professionals. Additionally, they have time on their hands as their only job is to audit and make reports, unlike internal employees.

Outsourced Vendor Audit Avoids Over Staffing

A lot of times, companies hire staff for auditing purposes and later regret doing so. What will you do with the auditing team when there is less work for them and there is a reduction in the auditing tasks? With outsourced supplier audits, there is much more flexibility to adjust based on variation in the workload.

Hiring a third-party company specialised in vendor audits, is often more affordable in the long run compared to hiring internal staff.

It is Faster and More Efficient

Based on various factors such as professional experience and the regularity with which the auditors execute audits, qualified vendor auditors are capable of completing duties related to auditing significantly faster than employees who undertake audits as an extra job responsibility.

Auditing companies carry out hundreds of audits each year and typically have experience across wide range of industries. Reports a written right after the audit, to ensure the auditor remember all the details. As a result, the turnaround time is much faster than when an internal resource conducts the audit as the report often is delayed due to other responsibilities.

If you are interested in how we can support with conducting your supplier audits or develop your audit program, then contact us for a free consultation.

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