What is a Standard Operating Procedure?
Whatever the scenario is, why not learn from it. Change up your procedures to avoid the same mistakes in 2020. Take steps now to work and improve the flow of your bookkeeping, by creating procedures, SOP (Standard Operating Procedure). Your company doesn’t need to be a large company with hundreds of employees to benefits from putting in place and following procedures.
Start by getting an outline of each position—not person, position—in your company. Then break it down into steps. If there are tasks that involve more than one position, those in the roles should work as a team. The goal is to, literally, walk step by step through the procedure to recreate the completed task.
Some of it may seem, elementary or tedious, but whatever action is required to complete the task, then it should be in the SOP. Creating operating procedures for each department can encompass the entire department, or be broken down into sections or sub-departments, like a workflow chart.
Example: When a new customer contacts your company, what is the procedure? Is it different if the contact is made in person or via your website ‘Contact Us’ section? How does that procedure move the customer to purchasing your products or service? Your SOP should define that. If there is no procedure to follow-up with potential customers, money is walking out of your door and into your competitors. The customer came to you because they want to buy what you have. Give them that opportunity to do so.
Developing procedures allows you to find holes in the systems, giving you opportunities to fix them. The unforeseen benefit, this can greatly benefit your bottom line. Maybe you are a manufacturer and you have someone tossing scraps from the cuts they are making in the sheet of metal. In the other end of your assembly line, and another department is ordering small sections of metal at a high cost due to the required prep work to create this inventory item. Lightbulb moment, potentially you have what you need right in your own factory. But you only discover this because you have an SOP.
Keeping your supervisor involved is also important. They will be the final review for revisions and to ensure flows between departments, are seamless. SOP will continue to evolve, change and need reviewed. It isn’t a one and done. Continue to refer and utilize the documents to ensure accurate and relevant to your company’s growth and changes.
My dad would say, ‘a loss is only a loss, if you don’t learn from it’. Take the opportunity to turn your frustration from the year-end prep work, into a lesson, using that energy to catapult you into a better ending this year. Create, review, and revise your SOP today. December 31, 2020 will be here soon. If you need help developing your financial procedures, contact us. We bring years of experience to the table in a multitude of industries.
Happy New Year!