How Retailers Can Improve Store Audit Effectiveness

ChecklistRetailers of all kinds rely heavily on audits to operate their businesses. Also known by many other names, audits may include store opening checklists, compliance questionnaires or standard operating procedures. Whether a quick-serve restaurant trying to ensure its stores comply with critical food safety regulations or a general merchandise retailer using audits to ensure stores consistently prepare for store opening in the same way, retailers typically use standard lists of questions or points to provide documented verification that all store locations are meeting directives delivered from corporate. The process of completing audits provides managers in the field with guidelines for what is to be done; a reminder each day, week, month or quarter that these activities must be

completed; and a channel for delivering information back to corporate headquarters. While many retailers use audits effectively, a great number are prone to common pitfalls that lead them to be ineffective. A few simple best practices can help retailers improve the effectiveness of audits across their organizations.

Common Challenges with Auditing

Pressed to maximize resources and implement creative and cost-effective solutions, retailers’ auditing systems are, in the majority of cases, of the “homemade” variety, such as paper-based audits or automated systems that have been developed in general-purpose software applications like Microsoft Word or Excel. Informal means are used to communicate the directive to conduct an audit, and then to follow-up with results and desired action. E-mail, in-person meetings and word-of-mouth instruction are frequently incorporated. These systems can cause information to fall through the cracks or create long lag-times between issuance of an audit and resulting action items.

Best Practices for Issuing Audits

The challenges for retailers are both collecting the necessary information and capitalizing on it in a timely, efficient and consistent manner. With the application of some additional effort and tools, retailers can maximize the value and efficiency of audits. The following are some recommended best practices.

Ask the right questions – One pitfall retailers often face is asking broad, obvious questions to which they already know the answers. If you know that compliance with food handling regulations is a problem, don’t ask “Does the store comply with all food safety regulations?” but rather ask questions to determine why compliance is a problem. More probing questions might include:

  • Do all new associates receive the four-hour training on safe food-handling procedures?
  • Do all food refrigeration units operate properly?
  • Do all existing employees receive annual training on safe food-handling procedures?
  • Is the temperature of all hot food service areas tested and recorded three times a day?

  • These more in-depth questions can help corporate understand why there is a problem and address it.

    Keep questions simple – One problem that is simultaneously most common and easiest to resolve is the practice of including unclear questions in audits. Too often, audits contain complex, multi-part questions that require the auditor to make a judgment call as to whether to answer the question yes or no, as some parts may be answered in the affirmative and others in the negative. Questions should have one part, easily answered with yes or no. If examples or illustrations are required to define the question, those should be included in the audit itself for quick and easy reference.

    Compare across audits – Well-executed audits do a great job of clearly outlining expectations from corporate to all store locations. An audit completed successfully in the affirmative should say to the store, “You are meeting the standards and guidelines provided by corporate.” Failure to complete questions in the affirmative tells stores that they need to improve in specific areas. The ability to pass weekly or monthly audits should, in turn, almost guarantee that stores will be able to comply with quarterly or annual audits. If audits are developed in silos by different individuals, however, they may not exhibit the kind of consistency of message needed. For this reason, all audits on a specific topic should be reviewed together to ensure consistency of message and directive. This will ensure that stores receive consistent expectations with each audit and that smaller audits lead the way to complying with larger audits.

    Take immediate action – Another common problem among retailers is failure to immediately follow up on insights gathered from audits. Often, either while the auditor is conducting the audit or upon reviewing the results, there are immediate action items or investigative points that should be noted or assigned before they are lost. In many cases, items that are addressed immediately are those that can be brought to compliance most quickly and easily. However, some retailers lack the processes or tools to immediately assign tasks or note that an investigation needs to be undertaken. By building processes to enable auditors to note action items within the audit itself or to enter them into another system, retailers can ensure that audits drive action.

    Better manage compliance – With many regulatory demands on retailers, ensuring that all stores can meet all regulations can be extremely challenging. Not only can retailers improve the effectiveness of the audits they are already conducting, but they can also maximize audits by expanding them to evaluate new areas of the business. While commonly used to ensure regulatory compliance with OSHA, food safety and other critical regulations, audits can also be expanded to gain insight into operations. Audits evaluating customer service performance, training and on-boarding new employees, and effectiveness of special promotions are just some examples of areas where retailers can creatively use audits.

    Document your work – Whether using a paper-based or fully automated system, retailers can and should turn to their audits to provide a documented trail of activity. If there is ever a problem, an inspector from a regulatory agency may request proof that the retailer took certain actions. Audits provide an excellent paper trail definitively demonstrating what actions were taken when. Retailers should be able to produce this documentation easily, which means having an audit filing system that organizes and saves results from previous audits.

    Properly designed and executed, audits are effective tools that help retailers gain a global understanding of what is happening in their business. This is no small feat, given the expansive nature of retail and the fact that stores are located across different regions, and operate in distinct demographic and economic environments. One of retail’s greatest challenges is to understand what is truly happening in the organization to determine where to apply resources to have the greatest impact. Audits are an inexpensive, simple way to provide that revelation and warrant a closer look by retailers.


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