Every organisation needs business processes and business systems to grow and thrive. Here are eight resources to help you implement the core business processes and improve existing systems.
A business system is a set of processes put in place that allow your business to run without you.
Once your business starts to grow, you will need to build business systems and processes that can be replicated by others within your business. In this way, no position or action is solely reliant on one person but can be taken on by others.
Within your business you must build several systems, like risk management, hr processes, IT systems, inventory systems and accounting systems. All of these are intrinsically important for your business’s growth and success.
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Business processes are an important aspect in your business because they:
- Provide consistency: Producing products and services become easier when you can deliver the same level of consistency.
- Ensure effective hiring and training: With a HR system in place you will save time and money by hiring the right candidate and getting them up to speed quicker.
- Business systems become assets: If you decide to sell your business, then the business processes that you have put in place will be of great importance to prospective buyers. Without systems and processes the business is too reliant on the owner, which will lessen its value. Also, effective business systems are a key component of franchises and national; without them it will be impossible for your business to successfully replicate itself.
Here are eight key business processes and business system resources to help you to set up and streamline your business operations:
1. How to set up business systems
Ensure that your business processes are documented. Do not over complicate this step, but ensure that it is done completely and accurately. This will provide a starting point for identifying opportunities for improvement.
Involve your employees when documenting business processes and when looking for improvements. Nobody understands the challenges in a process better than those people performing that function.
Make sure that your business process documents are kept up to date, properly backed up and that a copy is kept in a safe place for risk and business continuity purposes.
All processes in some way or another requires input from a person, whether to execute the process or to monitor the equipment that does – choose the right people and train them properly.
Make sure that the documented processes are followed! If you find that an individual is not adhering to the documented process, understand why. They may have found an even better way to do things, or it may identify an improvement opportunity in your training or induction programmes.
Continuously improve! Regularly question current practices.
Always remember that some processes could be inter-related and that changes in one process could affect another process.
Do what is most appropriate in your business – do not become fixated on what everyone else is doing. Discard conventional, fixed ideas about doing work.
Get assistance from business process experts to improve your business processes – the benefit will far exceed the investment if done correctly.
Setting up systems resource
This setting up systems resource is a comprehensive guide to building your business processes.
Businesses must conform to compliance controls and legal requirements in order to operate in the industry. It is critical for your business to ensure that it has adhered to the regulations, both in general for businesses and specifically for your industry. For example, depending on the sector you are in, you may be required by law to register with an industry association.
Some of the requirements your business will have to comply with include:
Human resources legislation: There are various human resources legislations that your business must comply with. These include:
- Unemployment Insurance Fund (UIF): You are required by law to register to UIf if your business employees staff that work more than 24 hours per month for you.
- Workmen’s compensation: The South African government has created a special fund to compensate employees for injuries or diseases that resulted from work. As an employer you must register with the Workmen’s Compensation Fund for your workers to claim compensation for occupational injuries and diseases.
- Skills Development Levies: Certainemployers must pay 1% of their employee’s wages to the skills development levy every month. This money may not be deducted from the employees’ salary however.
- Employees tax: An employer is required by law to deduct employees’ tax from their staff’s earnings. This amount must be paid over to SARS monthly
- Companies Act: The Companies Act lays out several rules regarding the duties and obligations of directors, as well as their appointment, resignation and removal. Companies must ensure that they are following both the fiduciary duty and duty of reasonable care stipulated in this Act.
Business compliance resource
This in-depth business resource details what business compliance and the legislation your organisation needs to be aware of and comply with.
Risk management systems
Risk management requires a process that requires a clear purpose, reliable inputs and value-added outputs. Risk management systems usually includes following the process of identification, sourcing, measurement, evaluation, mitigation and monitoring of the risk.
There are five steps to the risk management process:
- Identifying the risk: Risk identification helps you to identify risks so that you and your operations staff become aware of potential problems. Risk identification should be undertaken as early as possible and should be repeated frequently.
- Analysing risk: Once you have identified your business risks the next step is to determine the likelihood and consequence of each risk.
- Evaluate the risk: By evaluating or ranking the risk you can determine its risk magnitude, which is the combination of likelihood and consequence. Once this is determined you will be able to make prioritise the risk.
- Mitigate the risk: During this step you assess your highest risks and set out a plan to treat or mitigate these risks. There are four categories of risk responses – avoid, accept, reduce and share.
- Monitor the risk: Review and monitor risks on an ongoing basis. As in your business risks change and their priority might decrease or even increase – it is important to constantly check in on the risks that you have identified as well as any potentially new risks.
Risk management systems resource
To gain a better understanding of how to mitigate risks in your business here is an informative guide on managing risk.
IT best practices
Cyber crime is often a forgotten area in business management, especially with smaller businesses who don’t have the necessary resources to deal with cyber threats. But this is one area that you can’t afford to leave vulnerable to external attacks.
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Ensure that you have implemented IT best practices and keep your company records safe from prying eyes.
Here are three areas that you can improve to strengthen your IT security:
- Write a security policy: Some employees are more ‘tech-savvy’ than others, which is why you need to create a standard document to guide all staff members around the potential cyber threats that could affect your business. Make sure to constantly update this document so that it remains up to date with the latest cyber crime ploys. This IT security policy could include phishing practices, viruses and general access to the internet.
- Use strong passwords: Avoid using common words that can easily be hacked. Create passwords that are at least 12 characters long and contain upper and lower case letters, as well as numbers and special characters.
- Encrypt data: It’s not always possible to block hackers from accessing your records, but you can make it difficult for them to retrieve it. Encrypting data converts the information on your systems into unreadable code that hackers won’t easily decipher.
IT security guide
Keep cyber criminals at bay by arming yourself with information in this comprehensive IT security resource.
Your business environment and workplace is unique which means that you might have very specific ways of doing things, which is why you need to develop HR policies specific to your business.
Your HR policy development should follow these steps:
- Develop policy content: Review the legislation requirements for labour, these should be included in your policy. Refer to the business compliance resource for a list of employment requirements.
- Write the procedure: The procedure should give step-by-step instructions for carrying out the policy. This procedure could include the steps an employee must take to apply for leave in the company, or how to raise a complaint.
- Review of the policy by key parties: Involve the necessary stakeholders in completing the policy, such as managers as well as legal advisors so that it covers all necessary aspects and complies with legislation.
- Implement the policy: Communication is key with the implementation of policies, which is why you must inform your employees of these policies and ensure that they have access to the necessary documents. Keep all staff documents such as annual leave and sick leave forms in a shared folder. Ensure that every employee has a manual or document outlining the step by step procedures that they need to abide by.
- Policy review and update: Employment legislation changes over time, make sure that your policy is kept up to date with these changes, as well as any changes to policy within your organisation. These changes must be communicated to your staff as well and an up-to-date manual must be supplied so that they remain informed and aware.
HR management best practices resource
Your free HR best practices guide will assist you in developing programmes that will attract, select, develop, and retain the talent needed to meet the mission and goals of your business.
Procurement best practices
Procurement strategy defines a plan for optimising external spend, procurement operations and other value contributions in a manner that supports the overall business agenda. Here are five steps for building an effective procurement best practice strategy:
- Map procurement categories and review the procurement practice.
- Using the information from your review of the current procurement process, develop an overall procurement strategy.
- The overall procurement strategy establishes the framework for each individual procurement category strategies.
- Once you have defined the individual procurement categories the procurement strategy and category strategies are refined and completed. This step is completed in collaboration with your managers to ensure that the procurement strategy is both effective and understood by the relevant divisions.
- Prioritise the strategy initiatives and prepare the action plans that will go hand in hand with the ongoing procurement strategy process.
This complete guide will assist you in in the procurement best practices to base your procurement strategy on.
Setting up accounting processes
An accounting process is essential for your business to understand whether it is making a profit of a loss. The accounting process consists of the accounting cycle, which are used to record business transactions in accounting record and to finally process this information into the financial statements.
The eight steps of the accounting cycle are:
- Identifying and analysing business transactions
- Recording in journals
- Posting to the general ledger
- Testing the trail balance for any errors
- Adjusting entries
- Adjusted trial balance prepared
- Preparation of financial statements
- Closing entries for the next period
Credit management resource
You need to ensure your own business’s credit record is healthy, and you need to keep a watchful eye on how much money is owed you, who pays on time, and who is overdue. This credit management and collections guide will help you to manage your business’s credit.
It’s important to have a well thought-out sales process that includes seller and buyer risk management, standardised customer interaction in sales, and scalable revenue generation.
Every sale goes through the same seven-stage cycle, from prospecting all the way through to after sales service and asking your new customer for referrals.
This sales process resource will guide you through understanding of the basic sales process and creating a sales process that is specifically designed for your business.