How Much do Retail Audits Cost?

There are now mature, highly efficient, largely automated systems for conducting retail audits.

Some organizations devise their own system, one or more “checklists“, usually with Excel and email. Is this approach practical and cost-effective?

In this post, we compare how much retail audits cost, with and without retail audit software.

Let’s get started.

Excel and Paper Audits

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Audit Preparation

Audit preparation consists of scheduling the audit and notifying the store owner/manager (unless of course the audit is unannounced in which case it should be scheduled in the district manager’s calendar and visible to higher-ups but not to the store). Audit preparation also typically involves looking up past audits and preparing notes for the upcoming audit. This takes 15 minutes.

Transportation

Getting a district manager to a store takes time. In the very best of circumstances (a short drive, no flying), it takes 45 minutes to get a District Manager to a store and another 45 minutes to get her to her next appointment. District managers covering a large geographic area will of course take longer but the point of this exercise is to be conservative with our assumptions and numbers.

Audit, Action Plan and Follow-up

A regular audit is assumed to take 2 hours. Another hour is spent calculating the score, creating the action plan and printing and signing copies. Post visit, the district manager is expected to follow up on the action plan. With paper and Excel-based processes, this usually requires follow-up phone calls and emails. This takes an hour. The Excel or paper form is usually sent electronically or mailed to head office where it can be keyed-in to a central repository and stored. This takes 30 minutes.

With these assumptions, an Excel or paper-based retail audit takes 380 minutes of time. Using the industry average salary for a district manager of $68,781 (including benefits, see payscale), this translates into a cost of $222.25 to the organization. As any VP or Director of Operations knows, this is money well spent. In any multi-unit environment, ensuring compliance with service and merchandising standards is a key guarantor of success and risk-mitigation.

Which is not to say, you can’t do better! Compare the Excel and paper-based costs to those of a cloud-based solution like Bindy.

Retail Audit Software

Audit Preparation

Audit preparation is largely automated and greatly simplified with Bindy. The system offers a calendar (that integrates with Outlook) to schedule both announced and unannounced visits. Notification and reminder emails are automatically sent.

Looking up past visits is quick and easy. Past visits show trends, repeat problem areas and outstanding action plan items, if any. The district manager can type her notes into the scheduled visit ahead of time. This means that the audit preparation only takes 5 minutes, instead of 15.

Transportation

Again, it takes 45 minutes to get the district manager to the store and another 45 minutes to get her to her next appointment.

Audit, Action Plan and Follow-up

Bindy handles geolocation (“find my closest location”) and saves time to identify a store and the applicable form to start a visit. That’s 10 minutes saved from a 2 hour visit.

Bindy automatically scores the audit and, being fully electronic, does not require a paper trail (an electronic paper trail is automatically created). That’s 20 minutes saved.

The Bindy Action Plan is automatically constructed from all non-compliant items found during the visit. Creating the action plan is simply a matter of assigning non-compliant items to individuals, individually or in bulk. For this reason, instead of taking 45 minutes, it only takes 15.

Follow-ups are also largely automated. At any time, the DM can log-in to the application to see any visit with at least one outstanding action plan item. The DM can follow up electronically and assign tasks. No more phone calls and hard-to-track emails. For this reason, the time it takes to follow up is cut from 60 minutes to 15.

Lastly, being electronic and real-time, there is no need to mail or re-key data with Bindy. That’s another 30 minutes saved.

End to end, a Bindy field audit takes 235 minutes of time. Using the same industry average salary for a district manager, this translates into a cost of $137.45 to the organization.