Accounting and Audit News

Standard operating procedures (SOPs) are one of the most crucial management controls implemented by any organisation. In today’s world, businesses need a well organised system for documentation, defining clear processes, policies that ensure consistency, reliability, and maintain the quality with each department to achieve a common objective. 

For an organisation to flourish, SOPs must be part of their routine system right from start of the business and continue to evolve during the growth stage as well. They not only serve as an internal document for users to follow the define processes; but also serve the purpose to demonstrate external parties, regulators, auditors about the organisational’ s internal control system and risk management policies.

Generally, these SOPs are created basis the critical areas like Accounts & Finance, Production, Procurement, Planning etc as selected by the organisation. 

There are many benefits which an organisation can gain by effective implementation:

While is it very clear that SOPs have various benefits to the organisation; it is utmost important to define the characteristic of an effective SOP. 

Some of these characteristic or a standard structure of an SOPs should consist following:

Once the SOPs are drafted it must be shared with all the users to obtain their views and confirmation. This step is important to have a common understanding and alignment of interlinked task. After the obtaining the approval from the respective users, these SOPs must be presented before the board of directors for their approval and implementation.

One of the key aspects after obtaining the management approval is to have a training session for the entire team, where the purpose, usage and feedback are obtained. These SOPs should always be easily accessible in a dedicated area as document management control centre.

SOPs are essential for driving an organisation’s upward growth trajectory. In todays digital and complex era, companies are focused on sustainability, global footprints, and innovation. It is imperative to have a sound and robust internal process to optimize operational workflows.