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How Loss Prevention Audits Help Retail

retail audits

The loss prevention audit is a means of providing an objective and consistent evaluation of company standards, operating procedures and internal controls. Audits enable companies to address a variety of performance efficiencies that shape and influence service, sales, organization, security, productivity and numerous other factors that impact overall management and profitability of your store or facility.

Analyzing the results of a loss prevention audit can provide you with a multitude of insights in to the overall operations of a store. Compliance—and non-compliance—does more than provide you with specific information regarding how a specific strategy is being executed. The audit process will also provide insights about the bigger picture:

  • The leadership in the store and the way they supervise their teams.
  • Organizational skills and the overall way store operations are managed.
  • Management’s ability to plan, prioritize and multi-task.
  • The character of store management and how they perceive the importance of certain aspects of their job.
  • The sense of ownership that store management carries in making and keeping their store successful.

Auditing is a process, and should not be viewed as a single event that occurs in the store on any given day. Results should be reviewed and analyzed over time. Anyone and any store can show great results or great lapses in efficiency at any given time…but it’s how those results are received, how they are addressed moving forward, and how they are managed over time that will provide you with true insights.

It is vital that you approach audit functions with the appropriate understanding of your role in order to most effectively serve the company, the store, your associates and your customers. The spirit of the entire audit process should be one of growth and progress.

There will be challenges and opportunities, including:

  • This is what we found…
  • This is why it’s an issue…
  • Here is how it should be corrected…
  • Establish an action plan that facilitates correction and improvement…
  • Establish a timeline to follow up on the areas of opportunity…

The purpose is to reinforce principles that should already be familiar to those being audited and evaluate compliance with established performance standards. Too often, audits tend to focus on the negative. This unfortunate tendency can and will influence the entire process, and must be addressed in order to make the impression and realize the results that we hope to accomplish. Our methods and mentality should acknowledge achievements while recognizing the importance of training, education, and awareness as a means to send a message and improve our stores.

Driving Performance with Loss Prevention Audits

loss prevention audit should do more than evaluate performance. A well-managed program should also serve as a training tool that enhances performance through training and development. Compliance is a result of information effectively learned so that it can be applied, and behavior effectively inspired so that it will be modified and maintained. Ensuring that policies are correctly followed must be an emphasis of the audit process.

Tracking Results

There are many ways to input and track audits results. Some companies use paper audits and manually track the results. Some companies use software programs and handheld devices that enable them to instantly view, sort, and track results. However you do it, make sure that the results you track include the total audit scores, as well as the responses to each individual question.

The ability to quickly view the results of the inventory shrink audits should be a major consideration. Audit scores are important, but so are the common findings. For example, knowing that 95% of your stores failed questions 25 and 26 on the audit will enable you to determine why they are failing those questions and identify what needs to be done to get them back into compliance. Common findings should be reported on a regular basis so you can course correct throughout the time period leading up to your inventory analysis.

Communicating Results

Timely reporting of audits is important. As soon as an audit is completed, the results should be communicated to the store and the district manager. This enables them to take immediate action to correct identified issues. The sooner they can be addressed, the sooner they can be corrected.

Audits can serve as an important vehicle for ensuring operational compliance, enhancing awareness, measuring key performance functions, and providing valuable teaching and training opportunities. But our impact on the business is only as successful as our methods, our approaches and our attitudes when conducting the audit, when sharing the results, and when supporting the store teams. Information must be used in a positive and productive way. Our objective must be to improve the performance and productivity of our stores, and add value to the organization as a whole.

Loss prevention audits can be a tremendous tool in helping to validate performance and bring attention to store strengths and deficiencies, but it is how that information is used that will add value to the organization. We have to maintain a positive, objective approach when evaluating compliance. We should recognize exceptional performance when it exists.

We should not only identify opportunities for improvement, but educate the store on the reasons why it’s an issue, how it can potentially impact the store, and how we can make improvements.

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