Key considerations for building a scalable audit process

These days, many finance leaders focus on optimizing systems and processes to drive down the cost of their spend management programs. This challenge becomes more complex by pressures to increase profitability through acquisitions, new domestic locations or global expansions.

While analyzing spend data and defining the right policies are important first steps to building a program that can scale as you grow, finance leaders also have a fiduciary responsibility to ensure the organization is complying with global regulations, and that employees are following policies that have been set internally. Having the right controls and appropriate level of oversight in place is imperative, but what once made sense for your organization may change as you grow and expand.

When building a scalable audit process that will accommodate the growth initiatives of your organization, it’s important to consider when, what and why you are auditing. Below, we’ll explore each of these considerations in more depth.

To learn more about closing compliance gaps, read the full whitepaper. 

When

Depending on the nature of your business, what types of purchases are being expensed, where in the world you are operating and the maturity of your program, you will need to decide when you should be auditing: either before manager approval, after manager approval or after payment.

There are benefits and drawbacks to each approach, but to determine which is best for your organization, it will be important to have a grasp on current compliance levels. If you are unsure, or your program is new in a particular location, you may make your decision based on the need to uncover where compliance levels are currently at. Another consideration is the bandwidth of your audit resources – what is the best timing for your team based on their other processes and responsibilities?

What

Next, you need to determine what you will be auditing. With an increased volume of expenses flowing through the system, it can be difficult to decide where to focus your efforts.

If you’ve expanded globally to multiple locations, you may audit a different mix of submissions based on what types of teams are working in each area, or the region-specific regulations you are subject to in that geography. Whether you’re defining audit policy domestically, for new global locations or an acquisition, start by assessing your situation:

• What appears to be working or not working in your policy?
• What are the biggest areas of risk in each location?
• Who is doing the most travel or has the highest expenditures?
• What teams are based in each location?

The answers to these questions will provide you with some guidance as to what you should be auditing in your expense reports.

Why

During the process of defining your global audit policies, it’s important to keep in mind why you’re auditing. As your organization grows, so does the challenge of managing the compliance of your workforce. Your policies are in place for a reason, and with well-publicized auditing procedures, you can make sure they’re being followed. When you do identify trends of bad behavior, you can pinpoint the issue and implement corrective actions. With more employees spending company money, it becomes more important than ever to audit so you can control costs, capitalize on Value Added Tax (VAT) reclamation opportunities and prevent over spending.

With more expense and cost control complexity comes more regulatory risk. You need to have the right controls in place to catch instances of potential fraud or regulatory violations, such as the Foreign Corrupt Practices Act in the US and the UK Bribery Act.

How

Determining and implementing the right audit process can be daunting, especially if you’re building one that can scale with growth. That’s why it’s vital to tap into peer resources and look to other experts for guidance on the best approach.

To learn what your peers are doing from an Audit perspective, download our whitepaper: Closing the Gaps in Compliance, and get audit tips and best practices from other Concur clients.