An operational audit is a structured review that evaluates how efficiently and effectively an organization’s processes and resources are being used. Its purpose is to uncover waste, strengthen performance, and confirm that day-to-day operations align with business goals.
Getting this right is a good call for any organization because it drives smarter decisions, reduces risks, and supports long-term growth.
In this blogpost, we’ll explain what an operational audit examines, why it matters, its key benefits, and the steps to perform one successfully.
What is an operational audit?
An operational audit is a structured review that examines how well an organization’s processes and resources are being managed. The goal is to spot inefficiencies, reduce waste, and ensure daily activities support long-term strategic objectives.
When we talk about operations, we mean the practical side of running a business — workflows, staffing, use of assets, and the systems that tie everything together. An operational audit asks: are we doing things the right way, with the right resources, at the right cost?
Operational audits vs. internal audits
An internal audit is the broad function that covers multiple areas, such as financial audits, compliance audits, IT audits, and operational audits.
Each type has a distinct scope: financial audits check the accuracy of records, compliance audits verify adherence to laws and policies, and IT audits focus on systems and security.
Operational audits, on the other hand, specifically evaluate the effectiveness and efficiency of day-to-day processes. They are one branch of the internal audit tree — not the same thing.
Types of operational audits
There isn’t a single global standard that fixes which types of operational audits exist. The following categories come from professional guidance, but keep in mind that organizations may define or group them differently depending on their context.
- Efficiency audits — Examine how well resources such as time, money, staff, and technology are being used, with the goal of reducing waste and redundancies.
- Effectiveness audits — Assess whether processes and activities are meeting the organization’s intended objectives and delivering the expected results.
- Economy audits — Review whether resources are being acquired and managed at the lowest possible cost without sacrificing quality or performance.
- Performance audits — Take a holistic view by combining efficiency, effectiveness, and economy to evaluate how operations contribute to strategic goals.
Why do companies need operational audits?
Operational audits help organizations ensure that their resources, processes, and activities are truly supporting business processes and goals. By regularly reviewing how operations are run, companies can identify inefficiencies, reduce operational risks, and create a culture of continuous improvement.
Benefits of auditing operations
- Cost savings — uncover wasteful spending and streamline resource use.
- Process efficiency — improve workflows and reduce bottlenecks.
- Risk reduction — strengthen internal controls and minimize vulnerabilities.
- Better decision-making — provide management with reliable insights.
- Strategic alignment — ensure day-to-day operations contribute to long-term objectives.
How to conduct an operational audit? The operational audit process
Although there’s no single universal rulebook, most successful operational audits follow a structured process. This ensures the review is consistent, actionable, and aligned with organizational goals. Let’s walk through the main steps — using an example of auditing a company’s procurement process to make it more concrete.
1. Planning
The audit team defines the scope, objectives, and risks to focus on. For example, they may decide to review the procurement department to see if vendor selection and purchasing align with cost-saving targets.
2. Fieldwork and data collection
Auditors gather evidence through interviews with staff, reviewing vendor contracts, and analyzing purchase orders. In our example, they might compare actual vendor costs against market benchmarks and internal policies.
3. Evaluation and analysis
The information is assessed to determine efficiency, effectiveness, and economy. Here, the audit might reveal that the procurement team often renews contracts with the same vendor without competitive bidding, leading to higher costs.
4. Reporting
The findings are documented in a clear report. In this case, the report could highlight that while procurement is timely (effective), it isn’t always cost-efficient because the team doesn’t consistently seek alternative bids. The recommendation: establish a mandatory bidding process for contracts above a certain threshold.
5. Follow-up and continuous improvement
Management implements corrective actions and auditors monitor results. For procurement, this might mean reviewing vendor selection six months later to confirm if the bidding process reduced costs and improved supplier performance.
Operational audit examples
Operational audits often touch multiple areas of a business, which is why people sometimes confuse them with financial, IT, or compliance audits. Here are a few examples that illustrate this overlap:
- Procurement audit — Reviewing how vendors are selected and contracts managed. This may include checking financial records (like vendor invoices), which resembles a financial audit, but the focus is on efficiency and value for money.
- IT Service Management audit — Evaluating how the IT help desk handles incidents and requests. This can overlap with an IT audit (systems and controls) but remains operational because it looks at workflows, staffing, and response times.
- HR recruitment audit — Assessing the efficiency of hiring processes, from job posting to onboarding. While HR policies may need compliance checks, an operational audit looks at whether the process is timely, cost-effective, and aligned with company needs.
- Supply chain audit — Examining logistics, inventory management, and vendor relationships. This may involve compliance (e.g., safety regulations) or financial data (e.g., inventory costs), but the goal is operational efficiency and reliability.
InvGate as your operational audit software
InvGate Asset Management: 5-Minute Demo
Carrying out an operational audit doesn’t have to be a manual or overly complex process. With InvGate Asset Management and InvGate Service Management, organizations of all sizes can simplify the work and get reliable insights faster.
- InvGate Asset Management gives you a complete view of your IT assets, helping you track usage, identify underutilized resources, and control costs. Features like smart tags, asset depreciation tracking, and automated discovery make it easy to ensure assets are being managed efficiently.
- InvGate Service Management brings structure to processes with workflows, automation, and clear reporting. From monitoring service performance to aligning IT support with business goals, it ensures your daily operations run smoothly and transparently.
The best part? Both tools are no-code, intuitive, and quick to set up — so your team spends less time configuring software and more time improving operations.
Ready to make operational audits easier and more effective? Start your 30-day free trial or talk to our team today to see how InvGate can help your organization.
