Audit Your Business

When business is slow, it is a good time to audit your business.

I remember a Physics class where we were introduced to the term ‘Entropy’. Simply stated it is the state of disorder that enters into a system. This concept while introduced in Physics can be applied to management concepts as well. This is because with the passage of time a measure of disorder enters into managerial systems as well.

While you will have systems and procedures defined for your business, there will be times when there are deviations from the norm. These deviations will cause inefficiencies to enter the system or they may indicate shortcomings in your system. Either way, these need to be measured and actions taken to correct the process.

It becomes important then to conduct periodical audits of your system in which you can review the processes and systems. You need to ensure that you can:

• Measure the deviations in your systems

• Identify the causes for the deviations

• Identify possible solutions

• Decide on a solution

• Implement corrective action

There would be arguments on why you need to conduct audits and implement corrective actions when the ‘deviations’ can get results. There are a few:

• While the deviations may be getting results, they may be in conflict with your code of conduct.

• Deviations will point to wards inefficiencies which need to be corrected.

• Deviations may be in conflict with your product/process certification which may cause certifications to be cancelled.

• Deviations may be in conflict with government regulations.

To increase efficiency and comply with government regulations, you should conduct regular audits and corrective actions.

Audits will help you get a better understanding of your business and its requirements and will help you in improving your own systems and processes to achieve results in a more efficient manner.