COMMERCIAL AUDIT

Concept

The original concept for a commercial audit evolved from our own experience in business where we witnessed the increasing demand for the transfer of commercial risk from the customer to the supplier.

Understanding these commercial risks and turning them into opportunities can play a crucial role in gaining a competitive advantage for a product or service in the market. Similarly, simply avoiding risk can leave a business with a distinct competitive disadvantage. The key is to:

• Identify commercial risks that could provide a competitive advantage
• Exploit commercial risks to gain a competitive advantage
• Manage commercial risks to maintain a competitive advantage

This does not sound complicated but the reality can be extremely complex. As a result, the original concept has been developed to become a comprehensive analysis of all aspects of an organisation’s commercial activities. It will not only examine the commercial risks in an organisation but also look at the organisation structure, the customer base, how customers are managed and what routes to market are utilised.

What do we do?

A commercial audit can examine all of the commercial activities of an organisation or just a particular part of the operation. It can involve looking at the products and services themselves, to analysing the resource and infrastructure that are required to bring them to market. It looks at how customers are managed as well as the type of commercial offers that are available. It asks whether all of the potential opportunities have been identified and how the organisation manages any associated risks?

It is rare today for any commercial product or service to be sold in isolation as a one-off transaction. This is especially true in the b2b capital goods sector, where the customer offer can also include the provision of service and repair contracts, warranties, performance guarantees and payment plans. All of these ‘add-ons’ can be crucial in providing a competitive edge but they also introduce risk into the equation. It is this type of commercial risk that must be recognised, priced for, and managed.

The benefits

A commercial audit will enable you to take a step back and review the commercial activities of your organisation. Where appropriate, the audit will identify any gaps in the skills and resources of the commercial organisation and make recommendations on how to address any shortcomings found. It will help to identify and clarify both the opportunities and risks in the commercial operation as well as making recommendations about how to exploit and manage them. We also believe that the process itself can act as a catalyst and helps to unlock hidden potential within the organisation by presenting an alternative view and challenging the ‘status quo’.

Crucially, a commercial audit from Good Solutions is totally independent and has no hidden agendas. Ultimately, it is about improving performance but it can also help to protect the organisation by ensuring that any commercial risks are properly identified and managed.