You are going through an audit and the auditor has just requested a plant tour. Should you say yes?
Even though you may be reluctant to give the auditor a plant tour, it is an important step in the audit process. In fact, you probably don’t have a choice. Refusing to walk your auditor through your facility sends up too many red flags.
The plant tour is beneficial because the auditor can become familiar with your manufacturing process and learn important information such as when the manufacturing process begins and ends, what machinery is on the manufacturing line, and what these machines do to the product being produced. Remember these tips:
- Limit the amount of people that talk to the auditor during the plant tour. If one person knows the entire manufacturing process, allow that person to escort the auditor through the plant. Also, make this person the point of contact for any questions that the auditor may have during the audit process.
- When the auditor asks questions about what a piece of equipment does, answer the question as straightforward as possible. Do not offer additional or unrelated information. Some plant employees want to share all of their knowledge about the equipment and the plant, but this may open up a can of worms.
By limiting the number of people who talk to the auditor and keeping answers straightforward, the plant tour provides your auditor with valuable information that can speed up the audit process and may even reduce your assessments.
Have you ever regretted giving an auditor a plant tour? (Was it because you didn’t follow these tips?)
How has a plant tour benefitted you during an audit?
Your comments and/or questions are welcomed below.
Other recent “Manufacturing & Distribution” posts by Lauren Stinson, CMI:
- Manufacturing Purchases: 5 Sales-Use Tax Basics for Purchasers and A/P
- Manufacturing Exemption Misconception: Everything is Tax Exempt!
- Manufacturers’ Utility Studies: 5 Approaches to Utility Exemptions
- Manufacturing Sales & Use Exemptions: Open to Interpretation
- Use Tax Exemptions Case: Non-Traditional Manufacturer in Missouri