"Auditing for Transportation and Logistics: Supply Chain Efficiency and Risk Mitigation"
“Transportation contributes to the prosperity of a nation; Countries with better Transport systems are Leaders in Economy,” while Logistics enables effective supply chain management as it is key to ensuring the movement of goods and materials in an efficient and timely manner from one location to another. PKC Consulting focuses on helping the Transportation and Logistics industry by performing Statutory Compliance Audits, Physical Equipment Audits, Asset Management, Safety Policy Audits, and Payroll Audits as it helps in Supply Chain Efficiency and Risk Mitigation.
The efficiency of the supply chain of an organization is determined by how well it uses its resources to produce and distribute things, as well as how well it delivers the goods to the right place at the right time for the most affordable price. Preparing for disasters and having an approach for reducing the adverse impacts is referred to as risk mitigation.
Statutory Compliance Audits
PKC Consulting evaluates clients’ statutory compliance records and also assists in filing periodic returns. The potential Statutory Compliance Risks are detected and analyzed in advance so that they are prevented or corrected in advance. We provide ideas on how to minimize such risks. The applicable GST provisions on the Transportation and Logistics Industry, such as E-Way Bills (as per Section 68 of the CGST Act, 2017 and Rule 138 of CGST Rules, 2017), RCM Applicability (as per Section 9(4) of the CGST Act, 2017) and so forth are taken care of.
Physical Equipment Audits:
In the industry of Transportation and Logistics the vehicles or the means of transport owned by the entity is the valuable asset of the entity. Hence, such plants, properties, and machinery (hereafter referred to as PPE) should be maintained in such a way that benefits the entity. PKC Consulting comes up with several checks on PPE, such as wwhether the proper records of PPE are appropriate, conducting physical verifications of PPE periodically, and so on. Thus, we give assistance on proper maintenance of PPE, which results in the reduction of impairment in such Physical Equipment.
Asset Management:
Better the Asset Management; Better the Utility derived. Having complete data of the Assets, the service life and performance of such assets can be ascertained and such service life and performance can be extended by proper planning and preventive maintenance. A track on vehicle fuel expense helps the management estimate daily or monthly costs for subsequent periods and detect manipulations in the books of accounts, if any. Drafting a transportation asset management plan is a long-term process in the first place, yet it results in getting the most value of such a plan.
Safety Policy Audits:
Inspecting the maintenance of vehicles by the employees, periodic meetings with the management, and reviews of works performed are generally taken care of while performing safety policy audits. The Safety Policies are drafted only after the understanding of the nature of business and it is updated whenever required. It helps in mitigating the potential risk.
Payroll Audits:
The up-to-date payroll is maintained by removing the terminated employees appropriately and verifying whether the employees’ pay matches up with the hours worked. The payroll is reconciled by comparing the Payroll ledger and the Bank Statement. Also, PKC Consulting helps with appropriate withholdings and remittances of Tax requisites such as TDS, EPF, and ESI.
FAQs on Auditing for Transportation and Logistics: Supply Chain Efficiency and Risk Mitigation:
Is Auditing required for Supply chain efficiency?
Auditing lays a hand in finding the potential risk and guides in areas of improvement in the supply chain which results in increased efficiency by process optimization and operational cost reduction.
Does auditing contribute to risk mitigation?
Vulnerabilities in the supply chain are detected, and proactive risk management, which reduces the potential risks to the lowest level, takes place while performing audits which result in Risk Mitigation.
How can auditing help in Cost Management in the Transportation Industry?
Auditing helps find discrepancies in Billing, inefficient routes that lead to increased revenue expenditure, and other overcharges that lead to Cost savings.
What are the possible risks of not undertaking supply chain audits?
Avoiding Supply Chain Audits leads to several statutory compliance issues, increased costs, and operative ineffectiveness, which results in making the supply chain vulnerable to various risks.
What are the steps to be taken by the entities to ensure getting the utmost benefit from the audit?
An entity can gain the most out of an Audit by being involved in the initial audit planning and providing true and appropriate information to the Auditors and also by not limiting the scope of the auditors.
Author
Kaviyan S.P
An Article Associate with a passion for human connection, I invest in people and explore the profound meaning of life through the diverse souls I encounter. My experiences shape my writing, reflecting a deep understanding of the human spirit.
