As a manager for a retail chain dealing with ready-made garments, it's essential to have a balanced audit strategy that includes daily, monthly, and other audit formats.
Daily Audits
Daily audits are generally operational and focus on aspects such as cash handling, daily sales reconciliation, and security.
1. Cash Handling: Check the cash register at the start and end of the day to ensure all transactions are accounted for.
2. Daily Sales Reconciliation: Compare the sales made, as per the cash register, with the actual money received.
Monthly Audits
Monthly audits mostly focus on larger operational aspects and financials.
1. Inventory Audit: Count and verify the items in stock, compare the physical count with the system records. Any discrepancy should be investigated.
2. Financial Audit: Review the business's financial statements, including profit and loss statement, balance sheet, and cash flow statement.
Other Audit Formats
Other audit formats focus on the overall performance of the retail store.
1. Turnover Ratio: Calculate the inventory turnover ratio by dividing the cost of goods sold (COGS) by the average inventory for the period. This helps in determining the efficiency of inventory management.
2. Gross Margin Return on Investment (GMROI): This can be calculated by dividing the gross margin by the average inventory cost. It shows how much profit you make for each dollar invested in inventory.
Remember, the frequency of audits can vary depending on the size and nature of your business. However, a regular and systematic audit process will help maintain operational integrity, manage inventory, and ensure financial accuracy. If possible, consider using audit software to streamline the process.
For legal aspects, make sure you comply with the local regulations of Hyderabad, India, and ensure all audits are in line with the guidelines provided by the Indian Companies Act, 2013.