ArtsAutosBooksBusinessEducationEntertainmentFamilyFashionFoodGamesGenderHealthHolidaysHomeHubPagesPersonal FinancePetsPoliticsReligionSportsTechnologyTravel
  • »
  • Business and Employment»
  • Small Businesses & Entrepreneurs

Your Small Business: Using Standard Operating Procedures

Updated on August 3, 2012

Organize With SOPs

Following standard office procedures eliminates guesswork.
Following standard office procedures eliminates guesswork. | Source

Constant repetition produces boredom in many areas of life. You wouldn’t want to read the same novel repeatedly and you probably prefer a variety of foods in your diet. Nevertheless, repetition is necessary for running an effective business. Establishing standard operating procedures (SOP) allows you to complete tasks efficiently and quickly. Standardizing promotes continuity and reduces unwanted surprises and confusion. If you’ve ever spent hours hunting through stacks of receipts, just to find the one you’re looking for, you will likely benefit from developing standard procedures for your office.

Three segments of your business can benefit from implementing standard operating procedures; your financial policy, your pricing policy, and your production policy. Businesses may differ, but local, state and federal regulations require uniform adherence to taxes, licensing and, in some cases, the methods in which you do business.

Find Out More About Standard Operating Procedures

SOP Features


In addition to establishing workflow methods, your procedures may include instructions for directing calls, for sending memos and for compiling client lists and supplier lists. Filing invoices and receipts and following up on customer inquiries all fall under the heading of standard office procedures.

What are SOPs?


Standard operating procedures encompass a wide range of activities and varied levels of importance but all serve to create an orderly work environment. Filing and record keeping procedures are crucial for tracking clients, suppliers and sales. Additional procedures may reflect customer service policies, including ways to answer the phone and take messages or ways to handle disgruntled clients.

Can Standard Office Procedures Affect Financing?


"A financial lender may ask about certain office procedures before approving a business loan," advises John Willoughby, PhD, director of the Service Corp of Retired Executives (SCORE) in Wichita, KS. Not all office procedures will affect your ability to obtain financing, but a lender may request that you disclose your procedures for posting transactions, for maintaining records or for billing clients. Submitted to the lender in a written business plan, these procedures highlight your management skills.

The Importance of SOPs

Easy SOP Training Methods


Flow charts, designating a chain of responsibilities for the office staff, are often all that’s needed in a small office that follows a handful of procedures. If the business requires more structure, an employee’s handbook is in order. The Small Business Administration (SBA) suggests demonstrating each individual office procedure and then watching while the new employee completes the task, offering correction, if warranted.

The Need for a Business Plan

“A good business plan is the best way to determine what SOP your business will need, if you’re just starting up,” Willoughby suggests. “As the entrepreneur develops his plan, the need for standard procedures becomes apparent. As you work through your marketing goals and production goals, you’ll begin to see areas of need, such as the need for tracking potential clients or the necessity of a standard billing policy."

Automate SOPs with Bookkeeping Software

Standard Office Procedure Automation Options

Willoughby relates the importance of computers in automating office procedures. “New business owners without computer skills are at a distinct disadvantage.” Recording business transactions is time consuming if the bookkeeper must post each transaction to the General Journal and the individual accounting ledgers by hand. It takes only a few seconds to accomplish the task a computer with an installed accounting program.

Bookkeeping software programs can calculate future profit trends; they can automate business correspondence, print invoices and compile financial data, just by inputting transactions and customer information. If more than one person works in the office, a computer network allows data sharing between multiple computers.

Tax Considerations and Accounting


Tracking all your income and your expenses are vital in determining your income taxes and business taxes. In a small office, the bookkeeper may also be the Office Manager and the secretary, making it a challenge to complete all tasks while staying abreast of the latest tax law changes.

Willoughby suggests contracting with an accounting firm, at least during the startup phase of the business, if the business owner doesn’t have bookkeeping experience. “The regulations concerning employee withholding and taxes can be difficult for a new small business owner to master while they’re busy trying to get their business off the ground.”

Comments

    0 of 8192 characters used
    Post Comment

    No comments yet.