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Obviously, if you are the only person in the business, getting your operational procedures in place is not absolutely critical, although it is still important. But the minute you hire staff, it becomes critical that you have such processes in place. Failure to do so can be hugely costly.
For example, if your newly acquired staff member makes a mess of all the invoices that go out on a monthly basis, you could lose several customers and their sales as a result
If you don't document your processes and you dismiss or discipline that staff member, you could end up spending a great deal of time at the Commission for Conciliation, Mediation and Arbitration, not to mention the money that you may have to pay as compensation for an unprocedural or unfair dismissal.
Clearly, this can have devastating results on your bottom line and cash flow.
Your operational procedures include, but are not limited to, the opening and closing of a shop, office, warehouse and/or manufacturing plant. They include the "paper trail" for a sales process, from the time the sales rep secures the sale to the delivery of the goods and/or service.
Supplier procurement policy is also extremely important, particularly if you are registered for value-added tax and need to use every possible opportunity to recover it. It can also help you in terms of compliance with black economic empowerment policies.
The ability to hold your staff responsible and accountable is something that seems to have fallen by the wayside within small businesses. Many people want the title and the fancy car, or cellphone or expense account (or all of the above), but they seldom want to be accountable for their actions or inaction.
Having the correct policies and procedures in place means there is no grey area that can leave scope for confusion.
Staff should know not only what is required of them and how to perform their assigned tasks, but the consequences should they not complete those tasks correctly or timeously. Getting employees to perform tasks properly, is often as easy as explaining to them why it should be done in a particular manner.
It is my experience that not many people are eager to perform a task in a specific manner just "because I said so". But if you explain to them, in words they can understand, why you want that task performed in a particular manner, they will usually comply.
I am not suggesting for one minute that you must divulge all your business details. But it is important to note that understanding the "why" is often the difference between work flowing smoothly, correctly and consistently, and sloppy work being done.
To make life easier for all concerned, procedures should be available in two different options:
- The "quick start", which gives a simple step-by-step approach for when you have to process something very quickly, such as a credit card payment (if the client is standing in front of you waiting for his slip, for example); and
- The longer version, which explains why the process should be done a particular way.
Once staff are embedded in the business, emotions always arise, and with emotions come perceptions and expectations. Putting your processes and procedures in place removes the emotion factor, enabling people to get on with the business of business.
You won't have responses such as, "But I thought you said …" and "I'm sure this is the way you told me to do it", which I hear so often in the workplace. This is because the way you want something done is documented clearly, concisely and simply.
Less bickering and confusion usually equals more productivity, a more harmonious working environment and a win-win situation all round. Remember, though, to keep all of your policies and procedures simple.
This article first appeared in the Business Report on the 30th of October 2009
Nikki Viljoen is an internal auditor, business administration specialist and the owner of Viljoen Consulting, a specialist Internal Audit company. Viljoen Consulting recognizes the absolute necessity for SMME’s to implement best practices in respect of policies, procedures, flows, controls and other preventative practices, thereby protecting the company from possible fraud and other related losses.