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.

The Internet is great, isn’t it? You can do so much with it. More importantly, a lot of what you can do is free. Depending on your goals and requirements, some of these tools may require some knowledge of HTML but, for the most part, they do their jobs quite well. Some of the best “freebies”, listed in no particular order, are:

1. Google Docs - Online Office Applications (docs.google.com)

Google Docs is Google’s free web-based office application suite. It lets you create, use, and share documents, spreadsheets, presentations, and forms (for surveys and data collections).

2. AVG – Anti-Virus Tool (free.avg.com)

AVG offers a range of anti-virus and internet security software tools and compares favorably with other highly regarded players, like McAfee and Symantec. AVG’s free version is for individual users, which means you can’t technically use it for your business; see AVG’s web site for terms and other details.

3. Mailchimp – Email Marketing (www.mailchimp.com)

You’ve identified potential customers for your business. You also have a number of organizations that you’re doing - or have done - business with. If you need to get in touch with your customers and prospects and track how well your emails are performing, you’ll need email blasting software. Mailchimp does that — and more. An account with up to 500 email addresses is free.

4. WordPress - Blogging (www.wordpress.org)

Social media — in particular, blogging — is the rage not only for individuals, but also for businesses. If you want to blog without going through the hassles of installing software on your own website (which isn’t a very good idea, in the long run), you definitely want to go to http://www.wordpress.com. However, if you want to take full charge of the blogging process and make it part of your own website, WordPress, the open source and free blogging tool, is your best friend.

5. Gmail - (mail.google.com)

Online email that you can access anywhere, at any time — that’s Gmail. You can’t go wrong with Yahoo! Mail and Hotmail, either, but I like Gmail, primarily because I have a Google account and I’m using it all day, every day. And, as long as I’m logged into Google, it just makes sense for me to use Gmail. Another Gmail plus, in my estimation — the filter setting and labeling features of Gmail are very intuitive and easy to use.

6. Xobni - Outlook Tool (www.xobni.com)

For those of you drowning in the flood of emails in your Outlook “Inbox”, Xobni works wonders. It not only indexes your emails for really quick searching — it also shows the “conversations” you’ve had with the sender of any email, let’s you view their Facebook or LinkedIn profiles (based on their email addresses), and shows interesting and potentially useful tidbits, like who you respond fastest to, or who sends you the most emails.

7. OpenOffice - Office Productivity Suite (www.openoffice.org)

Need something that pretty much does everyting that Microsoft Office does, only for free? Well, then check out OpenOffice - your new best friend (but don’t tell WordPress). This Open Source office productivity suite has robust word processing, spreadsheet, database, and presentation tools, without the enormous overhead of MS-Office. It has built-in Adobe PDF file export capability, too.

8. FeedBurner - RSS Feed Management (www.feedburner.com)

FeedBurner is another Google offering — one that makes managing and distributing RSS feeds a breeze! FeedBurner is invaluable for promoting your blogs and podcasts. It lets you see how many people subscribe to your feeds and it has a feature that updates readers via email each time you update your company blog.

9. Joomla! - Content Management System (www.joomla.org)

A very powerful Open Source content management system (CMS), Joomla! lets you build websites and web applications. It’s designed to help organizations of all sizes, whether they’re building a website, a news portal, or an e-commerce site.

10. Bizmanualz – Policies and Procedures Samples  (www.bizmanualz.com)

Call it a shameless plug, but the company I work for provides some of the best written — and most complete — policies and procedures manuals, handbooks, and documents. And, we provide free sample procedures from every one of our 12 manuals! If you’re looking to write new - or enhance your existing - policies and procedures, you’ll love what we have to offer.

* * * * * *

In addition to the ten resources listed above, there are many, many more on the web — free and low-cost — that offer tremendous value to businesses of every kind and size. Have you used any of the tools in this list? What’s been your experience - good, bad, or other? What free web tools do you use that aren’t listed here? Which do you find most helpful?

Policies are the backbone of every organization.  Even startup companies that don’t yet have formal policies follow long-standing, commonly accepted “rules” of individual and corporate behavior — implicit policies (e.g., the “Golden Rule”) that guide them.  Formal, written policies guide appropriate (ethical) behavior in larger companies.

Yet, everyone has had to deal sooner or later with policies that are so poorly written that they’re without meaning and validity.  In short, they’re unenforceable.  But if good policies are so important to the company, why and how do bad policies happen?  Well, here’s how…

One: They’re Written for Problems That Don’t Exist

Outside of the corporate policy statement — which stems from your vision and mission statements — a policy statement is generally a response to a problem.  Policy is one aspect of a plan to rectify the problem (a corrective action, if you will). One example of a policy written in response to a problem is, “We will respond to every customer complaint within 24 hours.”

You write such a policy not for an isolated complaint, but because complaints are piling on top of complaints and customers are beyond “dissatisfied”.  If you’re introducing a new product or line of business and you have no customers yet…well, what’s the point of having a complaint policy? How would you know if it’s appropriate if you’ve never received a complaint?

Two: Employees Are Unaware That a Policy Exists

If you have a policy that no one knows about, it’s as bad as having no policy. The last time you wrote and implemented a policy, how did you get the word out to employees? How do you notify new employees that the policy exists and how do you train them?

Three: Policies Are Difficult to Understand

• They’re too long. Observe – but do not follow blindly – the Golden Rule of Policy Writing. If it’s longer than twenty words, make sure the point of the policy is perfectly clear.
• Their scope is undefined or unclear. Who does the policy apply to? Under what conditions? If it’s a blanket policy, it’s not an appropriate response to a specific problem.
• The policy is too complex. Another Golden Rule of Policy Writing ought to be “stay away from buzzwords, jargon, and platitudes”. Get to the point.
• It’s too vague. If the average employee can’t tell who the policy is meant for, what the point of the policy is, or you use indefinite words like “sometimes” or “often”, your policy will eventually be misinterpreted.

Also, if your policy lacks specific terms of compliance (e.g., a definition of compliance, how to monitor it, and what to measure), how do you know if people are complying?

Four: Who Owns the Policy Is Unknown or Unclear

Who has additional information regarding the policy? Who is empowered to make policy changes? If you’re not empowered but you see a need for a change, who do you go to and how do you get it taken care of?

Five: Responsibility for Enforcement is Unclear

Whether the penalty for a policy violation is “a maximum of 30 days in jail, $5,000 fine, or both”, “thirty lashes at the mast”, probationary status, or a stern talking-to, who’s going to enforce the policy? What enforcement tools are you giving them?

Six: Consequences of Policy Violation Are Unclear or Don’t Exist

How do you reward compliance?  How do you penalize noncompliance? Is the reward or penalty appropriate to the noncompliance? (Or, do you figure on using the “honor system”?)

Seven: People Don’t Believe in the Policy

This ties together “not understanding the policy” and “who owns the policy”. If your employees don’t understand the reason for the policy – if they don’t buy into it – they’re not going to throw their weight behind it. People need to have a vested interest in policy development, implementation, and enforcement. They need to participate in – have a stake in the outcome of – the process.

So, if you want meaningful, effective, and enforceable policies, start with these seven basic tenets:

1. Don’t write a policy for a nonexistent problem;
2. Be sure all employees are fully informed;
3. Write policies so they’re easy to understand;
4. Let everyone know who “owns” the policy;
5. Make it clear how the policy will be enforced and by whom;
6. State the consequences of noncompliance; and
7. Implement policies people can believe in.

Do you have an example of a really good – or a truly atrocious – policy? If it’s an example of “bad policy”, how might you make it right?

Best of luck, and best holiday wishes.
Steve

We began the current decade dealing with the aftermath of the “dot-com bust”.  Looking back, it’s laughable that we thought that was as bad as things could get (see #2, #10, below).  My candidates for the most important developments taking place in, or affecting, the business world in the decade about to end are (in chronological order):

1. Wikipedia (2001)

What might have been the first free information-sharing site on the Internet was created as a ”feeder” of information to an encyclopedia project called “Nupedia”.  The feeder project quickly outdistanced its parent and today is considered an important and reliable reference.  Wikipedia contains millions of articles in hundreds of languages on a wide range of topics, which allow businesspeople to quickly gather and use knowledge on any topic.

2. Accounting Scandals (2001)

The large-scale shell game that Ken Lay and others allegedly cooked up (Mr. Lay died before he could be brought to trial) ruined the livelihoods and lives of thousands of investors, many of them employees of the company who were persuaded to hold onto their Enron stock or buy more, even as Lay and other top company officials were selling theirs.

The collapse of Enron and companies like it (e.g., WorldCom) led to the passage in the USA of the Sarbanes-Oxley Act. Similar problems in Europe and elsewhere (e.g., Parmalat) led to worldwide passage of legislation mandating greater accounting and internal controls.  From that point, the practice of accounting changed enormously and — perhaps — irreversibly.

3. Google Adwords (2002)

The development of algorithms that enabled “virtual auctions” for keywords established a new kind of Internet business model, changing the way many companies advertised and redefining the sales pipeline.

4. BlackBerry (2002)

What began as a simple paging device became the first smartphone, supporting many more functions (address book, calendar, mobile phone, texting, web browsing, etc.) than just paging or voice transmission. The device’s multiple capabilities were found to be more than a little addictive, earning it the nickname “CrackBerry”.  The Blackberry’s popularity has increased as more functionality has been added.  It has spawned heavy competition in the wireless arena (see “iPhone”, below) and, of course, litigation.  (You have to expect that nowadays when you come up with a good idea.)

5. Facebook (2005)

A web app that business initially scoffed at, Facebook allows people of all backgrounds to set up or join social communities.  Naturally, businesses realized very quickly that this application provided yet another window into target markets, as well as enabled companies to use the growing number of Facebook users as another information sharing platform.

6. YouTube (2006)

YouTube even now is considered the refuge of the cheap, mindless video. That hasn’t stopped the business community from seizing the potential of this ubiquitous video source.  Companies are using “YouTube” to communicate with stakeholders and target markets — they present meetings, provide training to far-flung outposts, and test marketing concepts, among others.

7. Twitter (2006)

Another “window onto the customer’s world”, Twitter is one form of social media that a lot of companies are struggling with.  With countless media mentions, Twitter flourished in 2009, but, like with Facebook, it takes time to establish a community of followers. Most companies seem to be waiting on others to develop a viable business model for Twitter. Maybe there isn’t one.

8. Windows Vista (2007) and Windows 7 (2009)

We’re experiencing plenty of headaches with both.  How about you?  Are these “improvements” to the Windows operating system improving your environment, or are you — like me — ready to chuck it all and move to Apple or Linux?

9. iPhone (2007)

Considered the pinnacle of wireless devices even before its release, the iPhone is the one thing businesspeople absolutely cannot do without — they all love the *@&#$%! out of it —  and it’s desperately in need of a new home.

Most users I know wish Apple hadn’t struck that exclusive agreement with a carrier that shall remain nameless — they can’t wait until other carriers can offer it.

10. The Global Financial Crisis (2007 - present)

There isn’t one company — with the possible exception of bankruptcy lawyers and auctioneers — that has come through these last two years unscathed.  And the worst part?  We saw it coming and we still couldn’t get out of the way.  Greed, hubris, stupidity, naivete — call it what you want.  We all “drank the Kool-Aid.”

What would you add to this list?  Why?  What was the most important development of the last decade in your opinion?

Best wishes to everyone.  I hope we all have a much, much better 2010!

As 2009 limps — bloodied and beaten — toward its conclusion, here are a few issues that are possibly weighing heavily on HR managers’ minds:

1. Salary budgets are reportedly set for modest increases, at best, but given the last couple of years, for most of us any increase - however modest - is welcome.  According to one survey, increases for this last year averaged 1.9% worldwide and are expected to rise another 2.9% in 2010.  (However, at this time last year, they called for 3% and got two, so take a grain of salt. Another thing…how much is the financial sector skewing those numbers?)
2. Of course, this is the time of year for benefits reenrollment, for the declining numbers of us who still have company benefits.  In this corner, benefits aren’t being reduced, but we’re going to pay 5-10% more for them. (There went the salary increase.)
3. Speaking of health, GINA (the Genetic Information Nondisclosure Act) has just been introduced to the USA. A number of countries (e.g., Sweden, Israel) have had genetic privacy laws on the books for some time, but the US is taking a slightly different tack, not really playing catch-up.  HR departments will have to get the word out to hiring managers…for when they get around to hiring again.
4. How does a company retain its best and brightest if it can’t give salary increases?  Training?  Guess again.  Training budgets declined an average of 14% in 2009, according to “Chief Learning Officer“ magazine.  CLO also looks for an average 4% increase in training budgets in 2010, spent mostly on “efficient” delivery methods, like e-learning.  The ASTD (American Society for Training and Development) says that retail, government, and businesses operating on narrow margins are cutting back on training or cutting it out entirely.
5. Funds from the American Recovery and Reinvestment Act (ARRA) have been handed out at a glacial pace (it’s the government, after all), though it has had an immediate effect on unemployment benefits.  Stimulus funds don’t appear to be having an effect on employment rolls, according to the news on mounting job losses across the board.  Look any day, on any news site you favor — a few thousand jobs lost here, another few thousand there.  Yet, the Federal government reports more jobs being created each day.  Who’s right? In any case, HR departments don’t appear to be preparing for a return to pre-recession employment levels.
6. H-1B visas.  Always a touchy subject in the USA, the numbers have risen and fallen with the state of the economy so, of course, they’re down now.  High-tech firms, health care institutions, and educational institutions appear to profit most from H-1B workers.  The current annual cap is 65,000, according to the USCIS (excluding various exemptions).  If the job market keeps on its current unsteady course, expect the “hire American / hire H-1B” tug-of-war between labor and employers to intensify.
7. The Health Care Bill before the U.S. Congress: What will its final form be and how will it affect HR managers in the years following 2010?  Will it actually put the brakes on employment growth, as some prospective employers suggest?  What will be the ripple effect, if any, on commerce?

While we seem to be dwelling mainly on the USA, most of these issues weigh heavily on the minds of HR managers around the world, as well.  (”It’s A Glo-bal E-co-no-my / Af-ter All…”.)  These and other concerns don’t have an easy or quick resolution, either, yet we continue to be optimistic about the days ahead.  As a friend said to me just today, “We must have hope.”

HR specialists and managers out there…is there anything else that concerns you as 2010 approaches?

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

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.

When you think of accounting, do you think of accounts receivable, accounts payable, revenue recognition, and depreciation?  What about banking, cash flow, and financial statements?  Or tax accounting, costing, compliance, assets, and auditing?

The term “accounting” encompasses an enormous wealth of information, much more than the traditional “dollars and cents” we all think of.  It includes areas ranging from human resources (payroll, benefits, etc.) to computer information integrity.  So, since procedures on counting income and expenses are only a part of what makes up accounting, what do you include when you are designing an accounting policies and procedures manual?

The accounting area can be broken down into ten core cycles — these cycles make up the accounting body of knowledge.  Each cycle focuses on a key element of business accounting and, therefore, should be covered in your company’s business accounting policies and procedures manual.

1. Revenue Cycle Procedures

The first — and what business owners would consider the most important — business process is the revenue or sales cycle. Revenue is the lifeblood of any business. Once sales has obtained an order, the order must be “booked” into the accounting system, triggering your credit, fulfillment, and accounts receivable (or collections) processes. Example procedures for the revenue cycle can be found in the Bizmanualz Accounting Policies and Procedures Manual.

2. Cash Disbursement Cycle Procedures

The second most important cycle deals with how you manage your cash expenses. We’re talking about your purchasing, receiving, accounts payable, and administrative expense processes. Once you receive cash from your customers (revenue cycle), you must spend less than you receive to maintain a positive cash flow and stay in business. Sample cash disbursement cycle procedures can also be found in the Bizmanualz Accounting Policies and Procedures Manual.

3. Production Cycle Procedures

With the two key accounting cycles (making money and spending it) covered, the remainder of your accounting manual is devoted to accounting support processes. The production cycle is the most critical to your business — if you don’t have a product or service to sell, the first two cycles are immaterial, aren’t they?

The production cycle introduces issues such as managing raw materials, Work In Process (WIP), finished goods inventory, product release, and shipping. Example procedures for the production cycle can be found in the Bizmanualz Accounting Policies and Procedures Manual.

4. Financial Reporting Cycle Procedures

In the first three cycles, you took orders, purchased materials, made products and/or services, delivered products, billed customers, and now you must report your results. The financial reporting cycle includes budgeting and forecasting what you might need, reporting what you sold, financial analysis (to see if you’re making a profit, to spot trends, etc.), and management reviews with key stakeholders (the Board of Directors, your shareholders, government agencies, etc.) to discuss how well the plan is going.

Example of procedures for the financial reporting cycle can be found in the Bizmanualz Financial Policies and Procedures Manual. Notice we’ve switched manuals, going into the financial area of accounting.

5. Finance Cycle Procedures

The finance cycle is about raising capital and managing the capital you have. You might need debt or equity capital to finance your business. Either way, you’ll need a process to acquire and manage that cash.  And, if you have a lot of cash moving through your business, you’ll need some form of treasury management (i.e., how to invest or “park” your cash). Sample procedures for the finance cycle are in the Bizmanualz Financial Policies and Procedures Manual.

6. Asset Cycle Procedures

What business does not have assets?  If you have one or more computers, production machinery, or office furniture, you have assets. Your assets require processes for depreciation, inventory management, asset acquisition and asset disposition or disposal.

Since there are laws and standards (e.g., IRS, IFRS, GAAP) that must be observed, it is important that you have asset cycle processes. Example procedures for asset cycle processes are in the Bizmanualz Accounting Policies and Procedures Manual.

7. Internal Audit Cycle Procedures

Publicly traded companies and businesses with significant debt or equity require internal auditing. Your internal audit process consists of audit planning, conducting the audit, audit reporting, and audit follow-up. Sample procedures for the internal audit cycle are in the Bizmanualz Financial Policies and Procedures Manual.

8. Strategic Planning Cycle Procedures

If you have cash, assets, compliance, and stakeholders of any kind, you need a strategic planning process. Business planning is just that — a planning process necessitating a business plan.  The company business plan takes into account how to prepare for compliance (with SOX, SAS 70, etc.), standards and guidelines (e.g., GAAP, IFRS), and Board and stockholders’ meetings. Examples of procedures for the strategic planning cycle are in the Bizmanualz Financial Policies and Procedures Manual.

9. Payroll Cycle Procedures

The payroll process focuses on administrating compensation, benefits, and personnel compliance.  How do you comply with an alphabet soup of government acts (including EEO, FMLA, FLSA, EPPA, OSHA, ADA, ERISA, FICA, FUTA, IRCA, ADEA, HIPAA, IRS, WARN, and others)?

This may not sound like traditional accounting, but the accounting department is involved with compliance by virtue of its role as the financial gatekeeper and financial reporting contact. Samples of procedures for the payroll cycle are in the Bizmanualz Human Resources Policies and Procedures Manual.

10. Information Integrity Cycle Procedures

Today, all accounting transactions are performed on computers, across networks, and using IT assets.  Information integrity — specifically, security, timeliness, and accuracy — is critical to accounting, and to the business. Now it may not be accounting’s primary job to manage all IT assets, but accounting cannot shy away from its duty to ensure the integrity of computer and IT management, IT security, IT disaster recovery, and IT internal controls. Samples of procedures for the information integrity cycle are in the Bizmanualz Computer and IT Policies and Procedures Manual.

Sarbanes Oxley Compliance Cycle

Since the late 1990’s, there has been an increased focus on effective internal controls, adding, in effect, a new requirement — or 11^th cycle — Sarbanes-Oxley (or SOX) compliance.  The SOX cycle is about compliance planning, understanding your audit responsibilities, and demonstrating the effectiveness of your firm’s internal controls with respect to accounting. Example procedures for The Sarbanes Oxley compliance cycle are in the Bizmanualz Financial Policies and Procedures Manual.

There you have it!  Ten core accounting policies and procedures areas — plus Sarbanes-Oxley — that you should include in your accounting procedures manual.

We mentioned four key Bizmanualz products: Accounting; Finance; Human Resources; and Computer & IT. If you purchased these separately, they’d cost $2,280…but all of these accounting cycles and their associated procedures are included in the CFO Accounting Procedures Series for only $1,995!  Plus, you receive the Bizmanualz Business Policies and Procedures Manual for free when you purchase the bundle!  The Business Procedures Manual includes 111 additional business procedures for many general business areas.

Accounting Processes Policies Procedures

To truly implement a complete business accounting policies and procedures manual, you will need to include topics from Accounting, Finance, Human Resources, and Computer & IT  areas of the Bizmanualz product line.  Fortunately, you can obtain all four manuals and save 33% in one easy bundle - the CFO Accounting Procedures Series. It covers all ten areas of accounting plus the Sarbanes Oxley compliance process and — as an added bonus — you receive the Business Procedures Manual at no additional cost!  Try a free sample download.  Judge for yourself.

The Top Ten Accounting Policies and Procedures

1. Revenue Cycle
2. Cash Disbursement Cycle
3. Production Cycle
4. Financial Reporting Cycle
5. Finance Cycle
6. Asset Cycle
7. Internal Audit Cycle
8. Strategic Planning Cycle
9. Payroll Cycle
10. Information Integrity Cycle
    PLUS (for public companies) Sarbanes-Oxley Compliance Cycle

You have decided you need policies and procedures, but which business policies and procedures do you need?  Assess the business impact of each of your core business processes to generating revenue or introducing risk and then rank the results.  Core business processes that greatly impact your revenue or risk are where you want to start.

The Bizmanualz CEO Company Policies Procedures Manuals are designed with your core business processes in mind.  The nine business procedures manuals in the series provide your entire company with examples of the primary procedures used in writing your company procedure manuals.  How do the nine procedure manuals address the core business processes?

1. Customer Strategy & Relationships (Marketing) is a good place to start.  Most businesses talk about the customer being the most important part of any business.  Well, if your customer is so critical, have you mapped out a clear customer strategy and customer relationship process?  Do you have customer strategy procedures for developing awareness and education of your business in the marketplace?  The Bizmanualz Sales and Marketing Policies and Procedures Manual provides sample policies and procedures to help you set marketing strategy, marketing tactics, and marketing planning to cover the first part of your marketing sales funnel — awareness and education.

2. Employee Development & Satisfaction is essential to your business because your employees are the ones that talk to and develop your customers.  The Bizmanualz Human Resources Procedures Manual provides example procedures for hiring, administration (e.g., personnel records, compliance), compensation, and — the most important part – developing your employees.

The HR manual also includes a sample Employee Handbook and an HR Manager’s manual to provide a complete discussion of human resources.  Keeping employees and facilities safe is the focus of the Bizmanualz Security Procedures Manual, which includes coverage of guard force management, employee conduct, emergency operations, protection, and safety.

3. Quality, Process Improvement & Change Management is driven by competition, your desire to excel at what you do and make your customers happy.  The Bizmanualz ISO 9001 QMS Procedures Manual provides a sample quality manual, the six quality procedures required by ISO 9001, and additional supporting procedures to provide a foundation for your process improvement and change management initiatives.

4. Financial Analysis, Reporting, & Capital Management is critical to fast growth companies.  Cash is the lifeblood of your company and a fast growth company consumes cash quickly.  The Bizmanualz Financial Procedures Manual has example procedures for financial administration, raising capital, managing capital, financial statement reporting, and the internal controls necessary in a fast growth company.  A controllers manual is included to provide the direction and organization for controlling your company cash.

5. Management Responsibility addresses all of your core business processes and is integral to every area of your company.  Every manual in the “CEO Company Policies Procedures Manuals” covers the management of that departmental area.  Each manual provides a departmental (functional) manager’s manual that describes the departmental organization structure, major responsibilities, departmental guidelines, ethics, policies, and - of course - the primary business processes for that department.  The Bizmanualz Business Procedures Manual provides a simple, fast, and easy way to provide immediate oversight for all of your operations.

6. Customer Acquisition (Sales) is about engaging the customer and closing the sale.  The Bizmanualz Sales and Marketing Procedure Manual contains procedures for the entire sales funnel, sales process, sales administration and sales management common to organizations that have to oversee a sales force.  The Bizmanualz Accounting Procedures Manual contains procedures for controlling cash and the revenue cycle, which is a parallel and supporting activity to the sales process.

7. Product Development must obtain requirements from sales and develop products that satisfy the customer.  Therefore, product development procedures are found in both the Bizmanualz Sales and Marketing Procedure Manual and the Bizmanualz ISO 9001 QMS Procedures Manual, which contains procedures for customer requirements, as well as the design and development of new products.

8. Product/Service Delivery The Bizmanualz Accounting Procedures Manual contains procedures for shipping, receiving, and inventory control.  But since delivery is part of ISO and quality, the Bizmanualz ISO 9001 QMS Procedures Manual also provides coverage of this critical customer facing area.

9. Accounting Management is about accounting transaction management, as opposed to finance which is focused more on raising, managing, and using cash effectively.  The Bizmanualz Accounting Procedures Manual focus is on controlling operating cash receipts, cash disbursements, inventory and assets, the revenue cycle, and general accounting administration.

10. Technology Management is about all of the technology in your company.  The Bizmanualz Computer, Network and IT Procedures Manual contains procedures for IT administration, IT asset management, IT training, technical support, IT security, IT disaster recovery, and software development.  More in-depth continuity planning coverage is provided with the Bizmanualz Disaster Recovery Procedures Manual.

Business Process Policies Procedures

The Bizmanualz CEO Company Policies Procedures Manuals collection is the best overall deal — you save 45% when you buy the set, compared with purchasing all nine manuals individually.  The series covers all of the core business processes in one simple bundle.  It includes manuals for:

• Financial Policies and Procedures
• Accounting Policies and Procedures
• Computer & IT Policies and Procedures
• Human Resources Policies and Procedures
• Sales & Marketing Policies and Procedures
• ISO 9001 Quality Policies and Procedures
• Security & Disaster Policies and Procedures
• Business Policies and Procedures Sampler

Every critical area of your company is now covered with the Bizmanualz CEO Company Policies Procedures Manuals set.  Coverage is now easily at hand for Accounting, Administration, Customer Service, Disaster Management, Engineering, Environmental Management, Finance & Credit, Information Technology, Manufacturing, Personnel, Sales & Marketing, Security Operations, Shipping, Purchasing, Inventory, and ISO 9001 conformance.

Last week we talked about the top 10 Reasons to Use Bizmanualz Policies and Procedures Manuals. This week it is the top 10 Reasons to Use Policies and Procedures MS-Word Templates. What’s the difference? A Policies and Procedures Manual is made up of about 40 procedure templates. Bizmanualz templates utilize features that others do not provide such as references to regulations, an ISO 9001 conforming format, or a PDCA structure. Below are the top ten reasons for using Policies and Procedures MS-Word Templates:

1. An ISO 9001 conforming layout for easier readability.
   ISO does not require a procedure format but it does specify the procedures are approved prior to use, that changes and the current revision status are identified, that procedure are identifiable, and that suitable identification is used.  Bizmanualz policies and procedures provide for control, identification, and revision in every procedure template in order to conform to ISO 9001.
2. A clear and concise header block to ensure a procedure communicates the purpose and scope.
   Bizmanualz procedures include a header block with a Title, Policy, Purpose, Scope, Responsibility, and Definitions to help people understand your procedure.
   

   policies procedures manuals

3. Clear department responsibilities that identify who does what.
   Every procedure includes a Responsibility section in the procedure header that defines which positions are mentioned in the procedure and provides a synopsis of what is expected for that position in this procedure.
4. Key term definitions to reduce confusion
   If Industry jargon is used in a procedure than it is explained in the definitions section of the procedure to help new procedure users.
5. Plan, Do, Check, Act (PDCA) procedure structure.
   A PDCA structure is used to provide a logical flow that describe the key elements of a process that include the planning steps, what the exact “do” activities are, how you should check the results of your “do” activities to ensure the user is achieving the plan, and the “act” step of what or how to change.
6. Active voice construction to reduce task confusion.
   Subject, verb, object provides clear active voice construction for your procedure.  For example, “Product Management develops project plans” is clearer and contains fewer words than “project plans are developed by Project Management.”
7. References to related documents to improve usability.
   Procedures reference other procedures or forms, which saves you time in looking up those references and helps you train and implement your procedures.
     
8. Listing of applicable laws or regulations to communicate compliance.
   If you are implementing a records retention procedure then references to IRS or equal employment opportunity (EEO) passages provide a brief synopsis and help you implement your procedures.
9. Detailed list of revisions to track edit history.
   Revision blocks are provided to allow for comments and change dates.
10. Forms to ensure proper control and record keeping.
    Just about every procedure includes one or more forms to capture vital records needed for compliance, quality, or accountability.  All forms are provided in MS-Word format for easy editing.

Bizmanualz policies and Procedures MS-Word Templates is going to help save you a lot of time getting the basics down (research before action). It’s packed with good ideas on how to organize your management of a wide range of business processes. Documented sample policies and procedures will save valuable time for any department with limited resources. Bizmanualz Policies and Procedures provide the completeness, time saving and an easy to follow and understand way to get your policies and procedures project done fast.

Top 10 Reasons to Use Policies and Procedures MS-Word Templates from Bizmanualz

1. An ISO 9000 conforming layout for easier readability.
2. A clear and concise header block to ensure a procedure communicates the purpose and scope.
3. Clear department responsibilities that identify who does what.
4. Key term definitions to reduce confusion.
5. Plan, Do, Check, Act (PDCA) procedure structure.
6. Active voice construction to reduce task confusion.
7. References to related documents to improve usability.
8. Listing of applicable laws or regulations to communicate compliance.
9. Detailed list of revisions to track edit history.
10. Forms to ensure proper control and record keeping.