How familiar are you with document management software? Have you heard the term, or its acronym, DMS? Have you done some research on the subject, or even had firsthand experience with a document management system?

And what do you know about policies and procedures management software (PPMS)?  Is there a difference between document management and policy and procedure management?

Document management is primarily focused on version control — automated logging, tracking, and control of original documents and their revisions. Version control generally includes document archival, as well. But what about policy and procedure management? How’s that different?

Well, for starters, policy and procedure management software must work within a compliance environment. That is, policies and procedures don’t just tell us how and why we do things (their primary purpose), but they can also show your company’s compliance with regulations and/or standards. For that reason, P&P management software has to enable clear document control. Auditors look for such things as:

• Evidence that a policy or procedure was approved by the appropriate party prior to use;
• A system of periodic policy/procedure review (and update, if necessary, with reapproval); and
• Appropriate release of legible, identifiable versions at the point of use.

The big difference between document management and policy and procedure management software is in the workflow.  Document versions can be easily logged and managed in a database — document workflow requires business logic (a set of rules) to move the document along, with specific workflow state endorsements, or approvals.  An example of workflow state is in WordPress: this blog post existed first as a “draft”, then moved to “pending” (where an editor was notified that it was ready for review), and finally it was “published”.

In a policy and procedure management system, emails may be sent, the document may be transformed from Word to PDF format on release, and point of use distribution lists may be maintained with “required reading” logging.

Document management software is readily available from a number of vendors, but very few of these products provide full policy and procedure management features.  Using policy procedure management software, or PPMS, should reduce the number and severity of audit findings in your next audit. PPMS will also improve your document workflow and provide more information to more workers in less time.

If you’re purchasing Bizmanualz policies and procedures, think about how you’re going to manage your policy and procedure documents. Then, think about the new Bizmanualz policy procedure management software application: call (314-863-5079), email, or contact us at our website for more information.

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Companies have a variety of reasons for wanting to get their document management process under control.  What are the four main reasons for investing in a good document management system software?  How about security, saving money, efficiency and compliance.

Document Management Software Security

Electronic files are a lot more secure than paper files.  Document management software can provide an audit trail that tracks every document change and even file views.  Electronic systems can be easily backed-up in case of natural disasters like fire and flood.  Bottom line: your electronic files are safer and more secure.

Document Management Software Savings

The cost of manually producing, storing, retrieving and transporting paper documents and records is high, very high.  People are expensive and using people to file, find and move documents is just not practical anymore.  Think of all the money you can save, and office space you can free up, if you eliminate paper documents and records. Document management software virtually eliminates the cost of searching for, or worse recreating lost documents.

Document Management Software Efficiency

Retrieving paper documents from your storage location (is it off site?) is a ridiculas waste of time. How long do you have to wait to obtain paper files?  Document management software systems let employees quickly access documents and records from their desks, over the internet.  So no matter where you are you can now quicky and easily retrieve important documents and records.

Document Management Software Compliance

If document and records control are a requirement for compliance with Sarbanes-Oxley, ISO 9001, HIPAA, or some other regulations then document management software systems are simply the fastest, easiest, and cheapest solution.  All of your policies, procedures, work instructions, forms, regualtions, and customer documents can be tracked, controlled, and managed per your compliance requirements.  Document management software provides compliance at a glance, access control, physical security, audit history, review and approval work flows, email alerts, and comment tracking.  Reduce your document audit findings and keep you company in compliance.

Document management security, cost savings, efficiency and compliance are the four main reasons for investing in document management software systems.

When we talk about helping companies obtain ISO 9001:2008 certification, people often ask us, “Why does our company need to be ISO 9001 certified?” Good question. ISO 9001 is the quality management system (QMS) standard and it produces numerous benefits for any company willing to go that route. So, why should your organization obtain ISO 9001 certification?

1. Meet Customer Requirements

Many companies want to get ISO 9001 certified just to satisfy one customer requirement. The customer states that it will only do business with vendors that are certified as ISO 9001 compliant, so to get (or keep) the business they need that certification. The problem with these companies is that they’re looking for a short-term payoff.  They see nothing but that one benefit — we need money– and ignore the long-term benefits, like “if we keep the customer well satisfied, they will want to come back again and again”.

They don’t embrace the concept of quality through continual improvement. They don’t understand that continued customer satisfaction is the ultimate goal of a QMS. In other words, these companies haven’t “bought into the program”. See, you may obtain a piece of paper (that ISO certificate) that claims ISO 9001 certification without seeing much actual quality or improvement. Focusing only on that one benefit — your immediate gain — without putting the customer in front will end up costing you much more in the long run. Hopefully, some of the quality management system ideas may rub off and eventually stick…but wouldn’t you rather have a plan than trust to luck?

2. Get More Revenue and Business from New Customers

Once you earn your ISO 9001 certification, you can advertise your quality certification and respond to requests for quotes (RFQ) from companies that make ISO 9001 certification a “must-have”. ISO 9001 certification can open up new markets you were virtually unable to do business with before your certification.

3. Improve Company and Product Quality

A quality management system standard is all about quality (really!) so, of course, one result of adopting a QMS should be an improved level of quality for the entire organization — every process, and every product. There are many definitions of “quality”, but Philip Crosby and Joseph Juran provide two of the best. Crosby defined it as “conformance to requirements”; Juran called it “fitness for use”.  A well-designed, effectively implemented ISO 9001 Quality Management System will put your company on the Road to Quality.

4. Increase Customer Satisfaction with your Products

Quality means whatever you produce will work as your customers expect. You will meet not only their stated requirements — you will meet more of their implied requirements, too.

Quality also means far fewer complaints and doing a better job of resolving those you do.  If your quality management system is working correctly, you should know what your customers expect and you should be providing it, resulting in increased customer satisfaction.

5. Describe, Understand, and Communicate Your Company Processes

The ISO 9001 QMS standard requires that you identify and describe your processes using business metrics, the purpose of which is to better manage and control your business processes.  Quality objectives form the center of your system.  Metrics are used to understand and communicate your system’s performance relative to your quality objectives.  If you make an honest attempt to conform to the requirements of ISO 9001, you’ll learn more about your business.

6. Develop a Professional Culture and Better Employee Morale

Implementing an ISO 9001 Quality Management System can empower employees. Your QMS will provide them with clear expectations (quality objectives and job descriptions), the tools to do their job (procedures and work instructions), and prompt, actionable feedback on their performance (process metrics). The result? An improved company culture and a more professional staff!

7. Improve the Consistency of Your Operations

What is consistency? Well, one way to think of it is “decreased variation”.  Reducing the variation in your processes is the definition of consistency. Is your customer better served by you supplying them with a consistent product — same dimensions, same weight, same tolerances, same output every time — or by your products being unpredictable and “all over the place”? (I hope you’re not thinking too hard on this.)

Of course, they won’t accept variation, and neither should you! And how do you decrease variation?  Increase control of your processes!  Control comes from having a clear target to shoot for (objective), collecting data on the process (metrics), and understanding how to adjust the process (procedures and work instructions) to maintain the target output.  If your ISO 9001 QMS is working, you should be increasing operational…and product…consistency.

8. Focus Management and Employees

We’ve discussed quality objectives, metrics, and procedures used within an ISO 9001 Quality Management System. Having the right objectives, metrics, and procedures, management and employees should be able to focus better on what’s important.  Yet, this isn’t always the case — it’s easy to lose focus over a period of time.

The ISO 9001 QMS has a way to ensure the company stays focused, and that’s quality auditing.  Internal audits, registration (and surveillance) audits, and self-process audits. ISO 9001 requires that the company periodically audit its quality processes. Regular process audits and as-needed audits, when done correctly, provide the objective feedback needed to correct any deviations from the quality path and keep the company focused on its goals.

9. Improve Efficiency, Reduce Waste, and Save Money

An ISO 9001 Quality Management System isn’t perfect; no process and no one is perfect.  (Why else would the standard devote a clause to “continual improvement”?) A well-run QMS does enable your company to approach perfection.  As your processes improve, become more consistent, and you achieve your target objectives with greater regularity, you will see tangible results. Your process waste will decrease, for one.

Waste is money lost forever. Waste results from poor quality and inefficiency.  Inefficiency results from variation and inconsistent processes.  Reduce variation, improve consistency, and you’ll have less waste…and more money.  It’s that simple!

10. Achieve International Quality Recognition

ISO 9001 is a worldwide standard administered by the International Organization for Standardization (ISO), based in Switzerland. ISO 9001 is currently in use by close to one million organizations around the world!  It is truly a world wide standard for quality! Obtaining ISO 9001 certification puts your company in a very select group.

Why Should Your Organization Obtain ISO 9001 Certification?

Recapping the article, your company’s certification to ISO 9001 will help you:

1. Meet customer requirements;
2. Get more revenue and business from new customers;
3. Improve company and product quality;
4. Increase customer satisfaction with your products;
5. Document, understand, and communicate your company processes;
6. Develop a professional culture and better employee morale;
7. Improve the consistency of your operations;
8. Keep management and employees focused on quality;
9. Improve efficiency, reduce waste and save money; and
10. Achieve international quality recognition.

To learn more about improving your processes, attend our How to Create Well-Defined Processes Class, coming this spring to our St. Louis, Missouri, offices.

You’re invited to join the Group on LinkedIn. Joining will allow you to find and contact other Bizmanualz Policies Procedures members on LinkedIn. The goals of this group are to help members:

• Reach other members of the Bizmanualz Policies Procedures Group;
• Start or participate in discussions on policies, processes, and procedures (for instance, you could ask members, “What’s your company’s policy on…?”);
• Accelerate careers/business through referrals from Bizmanualz Policies Procedures Group members; and
• Know more than a name – view rich professional profiles from fellow Bizmanualz Policies Procedures Group members.

Here’s the link to join: http://www.linkedin.com/e/gis/86367/4EC1947970BF

Hope to see you in the group soon.

— The Bizmanualz Policies Procedures Group Leader

On November 21, 2009, the Genetic Information Nondiscrimination Act, or GINA, goes into effect across the United States. GINA, signed into law on May 21, 2008, is designed to protect Americans against discrimination based on their genetic information.  Employers cannot make decisions regarding employees’ health insurance and employment.  GINA requires that covered entities obtain and post notices informing covered individuals of their rights under the new law.

The Equal Employment Opportunity Commission (EEOC) has updated its “self-print” EEOC poster to include information about GINA.  All covered entities are required to post the most recent EEOC poster, along with five other required Federal posters.

Is Your Company a “Covered Entity”?

• Private companies with 15 or more employees
• Some public sector employers
• Employment agencies
• Labor organizations

Is Your Company Posting All Six Required Posters?

1. EEO - Equal Employment Opportunity Commission
2. FLSA or Federal Minimum Wage - Fair Labor Standards Act
3. OSHA - Occupational Safety and Health Act
4. EPP - Employee Polygraph Protection
5. FMLA - Family and Medical Leave Act
6. USERRA - Uniform Services Employment & Reemployment Rights Act

Depending on your company’s circumstances, you may have to display as many as eight other Federal posters to be in compliance:

1. DOL Wage/Hour Division Poster- Notice to Workers with Disabilities
2. MSPA - Migrant & Seasonal Agriculture Worker Protection
3. IRS Poster- Check Your Withholdings
4. EIC - Earned Income Credit
5. ARRA - American Recovery and Reinvestment Act
6. DBRA - Davis Bacon Act
7. SCA - McNamara-O’Hara Service Contract Act
8. LMRDA - Labor-Management Reporting and Disclosure Act
9. ADA - Americans with Disabilities Act

In addition, you should know and be prepared for the recently enacted American Recovery and Investment Act (ARRA).  While ARRA compliance is not an issue, certain aspects of the Act could have a positive effect on your workforce.

Your state is likely to require you to post certain information with respect to state labor laws, as well.  Check with your state Department of Labor or Employment Office; the US Department of Labor’s Wage and Hour Division is a good starting point.

One of the more complex — and frustrating — aspects of operating a business is the plethora of federal, state, and local employment regulations.  Many companies — small, large, and in between — are simply overwhelmed by the wide variety of labor laws they need to comply with.  (Did you know that by the time a company reaches twenty employees, it must comply with virtually all Federal labor regulations?)

Keeping track of the “alphabet soup” of acronyms and abbreviations is extremely challenging for business owners, top executives, and HR professionals, but they have little choice in most instances.  Not understanding and not staying current with labor laws raises your risk of noncompliance, which can leave your firm vulnerable to lawsuits, fines, negative publicity, and loss of revenue.  Simply failing to display any one of the six mandatory posters can lead to thousands of dollars in fines.

If you’re not sure whether your business is subject to ERISA, IRCA, ADA, COBRA, FMLA, and other employee protection laws, we’ve constructed a handy reference table (below), listing the major Federal Employment Acts and when compliance is required, based on company size.  Additional compliance requirements for federal government contractors are also listed, as are links to websites for the various government agencies that oversee these regulations.

A much easier-to-read version of this table is featured in the Bizmanualz Human Resources Policies, Procedures, and Forms Manual (ABR41), a product specifically designed to help businesses like yours maintain a procedural framework for regulatory compliance.

Federal HR Laws

Every company should document its accounting policies and procedures.  A well-designed and properly maintained system of accounting policies and procedures documentation enhances your accountability and consistency, while at the same time producing long-term savings from reduced duplication, rework, training, and increased focus, consistency, and productivity.

The resulting accounting policy and procedure documentation serves as a training tool for your accounting staff. Communication is essential to your internal control framework, and documented accounting policies and procedures are one of the best ways to communicate essential accounting information and make sure everyone in accounting is “on the same page”.  Well-designed accounting policies and procedures documentation promotes understanding between accounting and other departments.  Well-written accounting policies and procedures enhance your accounting audit process, as well.

There are several things you have to consider when documenting and maintaining accounting policies and procedures manuals:

1. Senior Management Support
   First and foremost, management commitment is the key to getting procedures used.  Your accounting policies and procedures program requires the backing and support of senior management.  Without top management’s express support, the proper control environment won’t exist and without that, compliance — with whatever regulation or standard (Sarbanes-Oxley, 8th EU Directive, ISO 9001, etc.) — will be extremely difficult to achieve.
2. Document the Actual Accounting Process
   You have to start with the current state of the accounting process, not the ideal state. You’ll confuse your employees if you document a future state, an aspirational process, or an improvement that isn’t currently in use.  Document the current state of your processes and train new employees on those procedures.  As you implement a given process, always look for ways to improve it.  Make changes to processes as needed, update the accounting procedures accordingly, and hold a training event on the updated procedures.
3. Employee Process Owners
   Are your accounting policies and procedures driving improvement and internal control ?  They will…IF you use your employees to drive the improvement process.  Put your employees in charge of documenting “their” processes.  After all, they know their jobs and they’re naturally in the best position to improve them.  Give your employees the necessary resources, focus them on the metrics for their job, then have them document their processes and train others.
4. Availability of Policies and Procedures
   Your documented accounting policies and procedures need to be available at the point of use, where they’re an integral part of the process. If they’re in another room, or if they’re not readily accessible on the employee’s computer, they won’t be used.  Out of sight is out of mind.
5. Define Employee Responsibilities
   Even the CFO has defined responsibilities, authorities, and metrics, contained in a job description.  Do all of your accounting employees have clearly defined metrics?  Do they know what’s expected of them each and every day?  Who has the authority to approve certain transactions?  Who is responsible for safekeeping assets and controlling records?  Your job descriptions should be more specific than “collects receivables”, for an example.  They should indicate how many transactions processed per day, or how to prioritize receivables in order of collections importance.  Job descriptions should also ensure that employees understand how their functions and responsibilities are integrated with other accounting processes.
6. Clearly Stated Purpose of Accounting Policy
   What’s the difference between policies and procedures? A policy is a guiding principle used to set the direction of an organization, while a procedure is a particular way of accomplishing something.  Your accounting procedures should explain the internal controls they utilize, in order to increase employee understanding of, support for, and proper usage of those controls.  You can address all accounting policies in the introduction of the accounting manual, or address specific policies at the beginning of each accounting procedure.
7. Periodic Policies Procedures Reviews and Updates
   Are your accounting procedures effective? Scheduled process-procedure reviews, integrated with your procedure writing standards (that include the “Seven Cs” to avoid procedure writing errors and your risk assessment framework), will help you identify deficiencies you need to address.
8. Utilize a Document Control Procedure to Approve Policies and Procedures
   “Document Control” is a procedure required by ISO 9001 because traceability and an improvement baseline for document changes are critical.  What if your accounting policies and procedures aren’t changing?  The world is not static — your accounting procedures shouldn’t be, either.  Remember, your competitors’ accounting procedures are changing.
9. Organize the Accounting Manual Structure
   A sample accounting manual structure should cover exclusions, the organization of the accounting department, the applicable accounting standards (GAAP, IFRS, etc.), your accounting cycles or processes, accounting transactions and timing, documentation standards, cost accounting methodologies, and statements of ethics or company restrictions or related party-transactions.
10. Create a User-Friendly Format
    Who are you writing procedures for? Accounting users, of course — but are they novices, occasional users, or frequent users?  Different users have different needs, but all users require an easy way to navigate through your accounting policies and procedures manual, or else they will not use it.  Use a table of contents, color-coded tabs, and index numbers for departments or sections.  Provide a detailed index in the back with cross references to related subjects, regulations, or standards.  Make your accounting policies and procedures manual easy to use and your users will use it.

Top Ten Things to Consider in Accounting Policies-Procedures Documentation

1. Senior management support
2. Document the actual accounting process
3. Employee process owners
4. Available policies and procedures
5. Define employee responsibilities
6. Clearly stated purpose of accounting policy
7. Periodic policies procedures reviews and updates
8. Utilize a document control procedure to approve policies and procedures
9. Organize the accounting manual structure
10. Create a user-friendly format

People often ask us, “What should be in our ‘Accounting Policies and Procedures’ manual?”, which naturally leads us to the next question, “What’s in your ‘CFO Accounting Policies and Procedures’ manuals?”  In other words, what specifically is contained in the manuals?  What accounting processes are covered when you order the five-manual Accounting Policies- Procedures bundle?

The CFO Accounting Policies and Procedures Manuals includes 239 prewritten accounting procedure templates and 373 forms organized within five functional business manuals.  All 612 files are in Microsoft Word format, so you can easily edit each file to suit your company’s particular needs. Topics are well-researched and are based on best practices, saving you countless time and enabling you to meet approaching deadlines fast.

Improve your accounting process with:

Accounting Revenue Cycle Procedures

There are many elements to the Revenue Cycle.  Key tasks include how orders are confirmed and entered, and how credit and collections are performed.  There are 13 accounting procedures that address this important accounting process:

1. Cash Drawers And Credit Cards
2. Cash Receipts And Deposits
3. Sales Order Entry
4. Point-Of-Sale Orders
5. Customer Credit Approval And Terms
6. Sales Order Acceptance
7. Invoicing And Accounts Receivable
8. Wire Transfers
9. Problem Checks
10. Sales Tax Collection
11. Progress Billing
12. Account Collections
13. Customer Returns

Accounting Cash Disbursement Cycle Procedures

The Cash Disbursement cycle deals with controlling expenses, confirming expenditures, and ensuring effectiveness of purchases.  There are 12 procedures in the CFO Accounting Policies and Procedures set that address cash disbursement:

1. Check Signing Authority
2. Check Requests
3. Vendor Selection
   

   Vendor Selection Procedure

4. IT Vendor Selection
5. IT Outsourcing
6. General Purchasing
7. Project Purchasing
8. Receiving And Inspection
9. Shipping And Freight Claims
10. Accounts Payable And Cash Disbursements
11. Travel And Entertainment
12. Controlling Legal Costs

Accounting Production Cycle Procedures

The Production Cycle includes processes like how orders are shipped, how freight claims are processed, and how production documents are controlled.   There are 3 production cycle procedures available in the CFO Accounting set.  (Note: additional production cycle procedures are found in the ISO 9001 Quality manual, which is part of the CEO Company Policies and Procedures set of manuals).

1. Shipment of Goods
2. Shipping And Freight Claims
3. Document Control

Accounting Asset Cycle Procedures

The Asset Cycle includes inventory, asset management, and asset acqusition processes.  There are 10 procedures in the CFO Accounting set that address important parts of this key accounting cycle:

1. Inventory Control
2. Inventory Counts
3. Fixed Asset Control
4. Customer Property
5. Asset Acquisition
6. Inventory Management
7. IT Asset Standards
8. IT Asset Management
9. IT Asset Assessment
10. IT Asset Installation Satisfaction

Accounting Audit Cycle Procedures

The Audit Cycle encompasses internal and external (third-party) auditing procedures, as well as performing corrective actions in response to qualified audit opinions.   There are 3 accounting procedures that address this important check step in the accounting process:

1. External Auditing
2. Internal Auditing
3. Corrective Action

Accounting Finance Cycle Procedures

The Finance Cycle includes such processes as raising debt and equity capital, working with leases, mechant accounts, and foreign exchange.  There are 12 accounting procedures in the CFO series that address key elements of the finance cycle:

1. Capital Plan
2. Valuation
3. Bank Loans
4. Stock Offerings
5. Debt and Investment
6. Leasing Procedure
7. Working Capital
8. Cash Management
9. Foreign Exchange Management
10. Managing Bank Relationships
11. Merchant Accounts
12. Letters of Credit

Financial Reporting Cycle Procedures

The Financial Reporting Cycle contains 18 accounting procedures for management reports, stockholder reports, and financial statement reporting.  All companies have financial reporting obligations to their shareholders, investors, and regulators, making this a key accounting cycle:

1. Chart of Accounts
2. Bank Account Reconciliations
3. Management Reports
4. Period-End Review & Closing
5. Taxes And Insurance
6. Property Tax Assessments
7. Confidential Information Release
8. Files And Records Management
9. Fixed Asset Capitalization & Depreciation
10. Annual Stockholders’ Meetings
11. Board of Directors’ Meetings
12. Financial Forecasting
13. Financial Reporting
14. Financial Statement Analysis
15. Financial Management Review
16. Financial Restatements
17. Financial Information Release
18. Related Party Transactions

Strategic Planning Cycle Procedures

The Strategic Planning Cycle addresses management responsibilities, various forms of risk assessment, continuity, and compliance.  There are 13 accounting procedures in the CFO Accounting Policies-Procedures set of manuals that support this accounting cycle:

1. Business Plan
2. Risk Assessment
3. Risk Management
4. Financial Objectives
5. Management Responsibility
6. Continuity Planning
7. Document Control
8. Record Control
9. IT Threat And Risk Assessment
10. IT Security Plan
11. IT Disaster Recovery
12. Sarbanes-Oxley Compliance
13. SAS 70 Compliance

Accounting Payroll Cycle Procedures

The Payroll Cycle addresses benefits, compliance, and employee performance appraisals.  There are 9 accounting procedures available to you that are included in the Payroll cycle:

1. Payroll
2. Paid and Unpaid Leave
3. Insurance Benefits
4. Healthcare Benefits
5. Compliance Posting Requirements
6. Employee Performance Appraisals
7. Employee Retirement Income Security (ERISA)
8. Consolidated Budget Reconciliation (COBRA)
9. Family and Medical Leave (FMLA)

Information Integrity Cycle Procedures

The Information Integrity Cycle is a key part of the accounting-IT interaction.  Key procedures in this cycle include computer and Internat usage, IT access control, IT management, and IT incident handling.  There are 9 accounting procedures addressing this important accounting cycle:

1. E-Mail Policy
2. Computer and Internet Usage Policy
3. Information Technology Management
4. IT Records Management
5. IT Document Management
6. Computer Malware
7. IT Access Control
8. IT Security Audits
9. IT Incident Handling

CFO Accounting Policies Procedures Manuals

In all, there are over 200 prewritten accounting procedures and nearly 400 accounting forms organized within the five functional business manuals of the CFO Accounting Policies and Procedures Manuals series.  Each procedure and form is available in Microsoft Word, so they can be customized to reflect the accounting processes at your company.

In Sarbanes-Oxley compliance your SOX policies and procedures have the same purpose as with ISO 9001 policies and procedures, to provide a foundation for improvement.  Sarbanes-Oxley is not a quality standard so why the need for improvement?

First, Sarbanes-Oxley (SOX Section 302 and 404) requires that your financial reports contain accurate information from controlled accounting and financial processes.  Second, signing executives have to report on the effectiveness of the company’s internal controls and disclose any significant deficiencies in the design or operation of those internal controls that could affect the company’s financial reports.

ISO 9001 uses terms like effectiveness and deficiencies too.  Only the focus is on continuously improving effectiveness and identifying non-conformances that do not conform to planned arrangements.   Sounds pretty similar to SOX compliance.

SOX Policies and Procedures Provide a Baseline for Improvement

SOX policies and procedures are used to build consistency, communicate SOX internal controls, and provide a baseline for SOX improvement.  This is done by indentifying a target performance (policy) and communicating a series of actions (procedure) to achieve the target. Risks are areas for mistakes, fraud, or abuse.  Internal controls are responses to mitigate indentified risks to the policy and procedure. 

For example, an accounts receivable policy might be timely invoice collection.  Your procedure consists of the steps to ensure a timely invoice collection.  Risks include an accounts receivable clerk taking cash, misapplying collections, or not collecting at all.  Internal controls could include: segregation of duties, cash application controls, bad debt reserves, credit policy, credit approval process, and so on.  Each control counters one or more identified risk to the accounts receivable procedure. 

But let’s say we missed a few risks, now what?  If it is determined to be a significant deficiency then you would disclose the risks that you missed and work on improving them.  With SOX policies and procedures like this, you are Sarbanes-Oxley compliant.  You have reported on the effectiveness of your controls and disclosed known deficiencies, just like with ISO 9001.  Sarbanes-Oxley compliance and ISO 9001 conformance are pretty similar in their implementation.

Bizmanualz Accounting Policies Procedures Manuals serve as a model, or framework, for your own SOX policies and procedures.  Save time with the CFO Accounting Policies and Procedures Manuals set, which contains 239 procedures you can use to address Sarbanes-Oxley compliance with the ten accounting cycles.

As the Chief Financial Officer (CFO) of your company, you are responsible to the company’s Board of Directors for all accounting and financial matters.  You must establish company-wide objectives, policies, procedures, processes, programs, and practices to assure the company of a continuously sound financial accounting structure.

1. Cash Flow.  As a new CFO, your job is to control the cash flow position throughout the company, understand the sources and uses of cash,  and maintain the integrity of funds, securities and other valuable documents. You receive, have custody of, and disburse the company’s monies and securities. New CFO responsibility includes the authority to establish accounting policies and procedures for credit and collections, purchasing, payment of bills, and other financial obligations.  Cash is king and the flow of cash, or cash flow, is the most important job a new CFO has in any company.
2. Company Liabilities.  After cash flow, the new CFO must understand all of the company’s liabilities.  A company has many legal contracts, hidden liabilities in the form of contingencies, leases, or insurance summaries, and expectations from loan covenants and/or the board of directors.  As a new CFO, if you’re not watching out for the liabilities, who is?
3. Company Performance.  The new CFO must understand the company business model for generating customer value and translating the operational metrics into measures for performance.  The new CFO is the company scorekeeper using tools like the balanced scorecard, dashboards, and financial statement ratio analysis to communicate the company’s financial performance.
4. Department Supervision.  In a small organization, the CFO is the supervisor of Accounting, Finance, HR, and IT.  In a larger company, the CFO may only be responsible for the Accounting and Finance functions.  Either way, the new CFO supports the company’s accounting and financial functions using job descriptions, policies, and procedures.
5. Budgeting and Expense Control.  Budgets are a fact of life, and the new CFO is responsible for overseeing the budget process, collecting the inputs, and comparing the company’s actual performance with estimates (the budget).  It is an ugly process that falls within the CFO area of control.
6. Financial Relationships.  As a new CFO, you establish and maintain lines of communication with investment bankers, financial analysts, and shareholders in conjunction with the President.  You administer banking arrangements and loan agreements and maintain adequate sources for the company’s current borrowings from commercial banks and other lending institutions. In addition, you invest the company’s funds and administer incentive stock option plans.
7. Finance or Raising Capital.  You would think that finance is one of the key roles of the Chief Financial Officer.  Yes, it is important, but it comes after other more pressing operational issues, like those listed above.  The new CFO will establish and execute programs for the provision of capital required by the company, including negotiating the procurement of debt and equity capital and maintaining the required financial arrangements.  As the new CFO, you’ll coordinate the long-range plans of the company, assess the financial requirements implicit in these plans, and develop alternative ways in which financial requirements can be satisfied.
8. Financial Obligations.  As the new CFO, you need to approve all agreements concerning financial obligations, such as contracts for raw materials, IT assets, and services, and other actions requiring a commitment of financial resources.
9. Record Control.  The new CFO is responsible for the financial aspects of company real estate transactions and executes bids, contracts, and leases.  The CFO also provides insurance coverage, as required, ensures the maintenance of appropriate financial records, and prepares required financial reports.  The CFO has primary responsibility for ensuring company compliance with financial regulations and standards, like Sarbanes-Oxley, the IRS Tax Code, and GAAP (and soon, IFRS).
10. Shareholder Relations.  A new CFO analyzes company shareholder relations policies, procedures, and information programs, including the annual and interim reports to shareholders, as well as recommends to the President new or revised policies, procedures, or programs when needed.

The Top Ten Responsibilities for the New CFO:

1. Cash Flow
2. Company Liabilities
3. Company Performance
4. Department Supervision
5. Budgeting and Expense Control
6. Financial Relationships
7. Finance or Raising Capital
8. Financial Obligations
9. Record Control
10. Shareholder Relations

As a new CFO, sample accounting policies and procedures would be helpful to serve as a model, or framework, for your own accounting policies and procedures.  Save time.  The CFO Accounting Policies and Procedures Manuals set contains 239 procedures you can use to address the ten accounting cycles within your responsibility.