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SOP’s benefits in small and finance companies- How to write an SOP in 5 Steps?

Benefits-of-SOP

Introduction 

SOPs or Standard operating procedures (the acronym for SOP)

Ever happened? You assigned a task and got an altered picture of what you wanted.

You assumed you covered everything, even going back and forth several times while explaining.

Still, tons of errors or task straight up wasn’t understood correctly in the end! 

To bridge this gap between expectations and execution, you need to follow SOPs.

No one likes to compromise on tasks in a manner of communicating with a third party – Execution must be per your plan you pulled nights to think of.

SOPs communicate the project’s requirements with employees and internalities in a consistent manner and fashion every time- thus, operational efficacy. 

In this blog, we will tap into how to create an SOP – deal with various projects – and communicate in a clear and complete way!

Let’s get started!

How can you integrate SOPs in your business or various departments?

An SOP must not only be about delegating the operations but the IMPACT.

It should complement, must be flexible and scalable with business objectives- SOPs always streamline processes to make room for innovation.

Let’s make it a piece of cake.

A simple SOP is a cake recipe – What, where, when, why, how, and who.

What ingredients do we need for baking? Where’s the bread going to be baked, in-house or third vendor? When will it start baking and serving? Who will handle baking, serving, or customizing it per customer?

SOPs and this recipe can lay down in various departments— Accounts & Finance, HRD/ HRM, Production, Purchase/ Inventory, Planning, Legal, Marketing & Branding, Sales, Corporate Communication, etc.

SOPs in Finance and Administration

  • Accounts Payable SOP (Purchase & Payments)
  • Tax Compliance SOP
  • preparation of sales quotes
  • warranty, guarantee, refund/exchange policies, the practice of sales quotes
  • Banking & Investment Management SOP
  • Roles & Responsibilities of the Accounts Team

So, ask what, where, when, and why.

And there you go!

Importance of SOPs in business 

One of the major benefits of having SOPs is — it stays. 

Personnel can be volatile or may leave, but SOP will forever guide your company and employees. 

  • In the first line of defense in any inspection – regulatory bodies, partners, clients, or a party serving due diligence for a transaction, SOPs will assist in proof validation.
  • Cash inflow-outflow management: to run your business, especially in the beginning, you need streamlined workflows— and optimizing with SOPs allows better accountability management. Whether it’s billing procedure, customer or vendor transactional steps, and production line operations, all you can handle with the SOPs guidelines and circle back to the accountable partner!
  • Value added to your business. Thus, ensuring day-to-day transactional governance, implementation of statutory compliance measures, customer experience (CX) consistency, and a reduction in employee training time.

How to create an SOP for your business operations?

1. Devise a purpose 

Don’t put it on complete, just like another formality. 

Find a purpose and mitigate unnecessary complexity.

A purpose is all about the big picture – A route where you want to see a particular operation flow. 

This way, you can structure the SOP with meaningful steps without plot holes.

Find purpose and scope- why you need it, and for whom or will this help immensely, or even needs to be done?!

Gauge the value weightage!

2. Formats and templates

Make a small SOP for your SOP.

It becomes very crucial if you’re striving for consistency. 

Ask yourself what you need to follow – How-to formatting, step-by-step guide, or bullet point description. 

Let’s break down possible formats you can consider:

  • A simple steps format. This is for short routine procedures, just a simple bullet list of steps guiding the reader on what to do.
  • A hierarchical steps format. This is usually for long procedures – with more than ten steps.
  • A flowchart format. A flowchart is most favorable when the procedure can come up with infinite possible outcomes and the result is unpredictable.

3. Writing one

Here comes the practical part- how to write one?

Chances are employees are not reading the SOP for fun – so formalizing it further will not help much!

Here are the practical steps: 

  • First, add a conversational tone to your SOP so they don’t end up being skipped. 
  • Divide your big chunks of paras into small sentences and bullet points- skip fluff Info and repetition – that’s why outlining it first is always better.
  • Keep the fonts and size readable. 
  • In addition, use visuals to increase engagement with your SOP. 

4. Must haves

It all depends upon the topic- what needs to be included and what’s not. But basic elements must be there and are the same-

Here’s: 

  • Title of the procedure
  • SOP ID number
  • Day and time of issuance, 
  • The name of the department or team the SOP applies to, 
  • The signatures of those who prepared and approved it. 

This helps troubleshoot the risk- it covers what could possibly go wrong, things to watch out for from now on, and what may interfere with the ideal situation.

5. Consider your knowledge.

It all boils down to this – Are you the best person to write the SOP?

Ensure the process entails- what can go wrong and then how to reverse back and make it safe.

A poorly written or inaccurate SOP will not only lead to organizational and operational delays or failures – but it can also be unsafe in the line of defense.

If necessary, interview the personnel involved in the process on how they execute the task- and create your own with SME assistance.

FAQs

1. What is an SOP? 

An SOP, the standard operating procedure, is a document – specifically to make every operation happen in an identical manner irrespective number of times. Thus, bring continuity throughout activities while considering industry regulations, provincial laws, or even your unique standards per your business.

2. What is the purpose of having a Standard Operating Procedure?

A standard operating procedure SOP ensures everything happens, in the same manner, every time, while complying with all the necessary laws and regulations. Thus, it also saves time and brings efficiency to business operations.

3. Who creates SOP in a company?

An internal team or an SME can write an SOP. Or else, it can be outsourced to a third-party expert where you can consult directly with experts and create your SOP to the individualized needs accordingly.   

How we can help! 

Having an SOP in place makes things done with more accuracy and saves time. However, it needs precision and experience – you don’t have to worry about it further! 

We at FinaAccountants, with our consulting team of professionals, help businesses build robust SOPs and systems so they can focus on the core of running their business. Consider us your one-stop solution for finance-related advisory, and leave finance to us!

Book a call!

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