Business process documents: Policies, procedures, instructions, oh my!
Are you unsure about the difference between a procedure, policy and instruction and when they should be used in your business? You'll be a ‘Wizard of Docs’ by the end of this article.
Here is an outline of key small business process documents in order of importance, and how they will benefit your business.
A business manual acts as a road map for your business. It should contain information about your core business and key personnel, key policies, outsourced activities and more. The business manual sits at the top of the document hierarchy.
You would benefit from a business manual if you need to:
- provide an overview of your business to investors or buyers
- explain your business to new employees
- take leave or recover from illness, in which case a manager could refer to it
- provide it to clients or suppliers (with or without a confidentiality agreement) to improve their confidence in the management of your business. This is especially useful when tendering.
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"You would benefit from policy documents if you need to set the tone or expectations about a particular topic but don't require specifics."
A policy document is a statement of intent and does not include specific task details or how to perform them.
A communication policy, for example, may include statements like: “We will ensure that we communicate with all clients on a regular basis.”
Note that it does not include specifics such as:
- how (e.g. by phone);
- who will do it; or
- what form of communication might be used.
Policies do not have to exist as a standalone document. Policies are often incorporated into the business manual.
You would benefit from policy documents if you need to set the tone or expectations about a particular topic but don’t require specifics.
A procedure describes how the business is going to achieve their intentions (who, how, what, where). A procedure doesn’t necessarily provide step-by-step instructions but rather gives broader guidance. Procedures often address a process or area, which then consists of a number of different tasks; i.e. the process/area might be customer service, while the task is client calls.
Example: A HR/Administrative procedure might outline such tasks as:
- expenses management – what information is required to submit expenses
- mileage – what can be claimed
- scheduled pay dates – fortnightly
- leave arrangements available – maternity leave, sick leave, carer’s leave etc.
You would benefit from procedures if you need to:
- have guidelines that provide some structure to a task or series of tasks
- assign responsibility for these tasks
- say where or when these tasks should be performed.
Instruction documents support procedures. They include step-by-step directions on how to do the work and generally include a list of all the tools/materials necessary to complete the task. The person performing the work should literally be able to complete the task (after training) without having to consult any other document or person.
Example: You may have instructions for processing customer returns.
You would benefit from instructions if:
- there are multiple procedural tasks to perform in your business
- you require personnel to be able to complete tasks independently
- the tasks involve complex step and require many tools/accessories to complete them.
Records are supporting documents that provide evidence of work completed. (Forms etc. are not referred to as a record until they have been filled out)
Examples: Financial records, client requirements/details, induction checklists, task checklists, website forms, letter or email templates, maintenance logs etc.
You would benefit from forms/checklists if you need:
- to keep a record of the information provided or the work completed
- a standardised way of producing a letter/email/document
- to keep permanent records as a regulatory requirement.
Ultimately you need to structure your documents so that they best suit your business. Hopefully by clarifying these different document types you’ll know exactly what you need and where to start on the Yellow Brick Road of business documents.
Does your small business benefit from any or all of the documents above?
This article is the first in a series on ‘Business process documents’. The next article, ‘How to create quality instructions’, provides practical advice for those interested in writing their own instructions.