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Full Form of SOP

Updated on April 16, 2024
Article byWallstreetmojo Team
Edited byWallstreetmojo Team
Reviewed byDheeraj Vaidya, CFA, FRM

Full-Form of SOP (Standard Operating Procedure)

The full form of SOP stands for Standard Operating Procedures, which are the set of documents and processes used by a business where the management records the business operations regarding the delivery and follow-up of the products and services over time.

  • The management has to keep track of its operations’ consistency. Based on it, these documents are necessary. In the case of a growing business, the management becomes the key personnel and takes all the major decisions.
  • As the business grows to the next level, the company starts to build its management hierarchy and spreads the responsibility to all the other personnel. Thus, the owner is getting its helping hands whereby he can make the decisions by consulting with the other management personnel.
  • Thus, the requirement of additional management along with documented standard operating procedures becomes obvious, allowing the company to grow, establish its strategies, and train the staff.
Full-Form-of-SOP

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Aims

  • It helps to establish the strategic management of a business by providing the steps that top-level management should follow to establish the company’s long-term strategy.
  • Establishes the human resources department by synchronizing the payroll management and recruitment segment, which helps the company to provide the services required to qualify, hire, train, and retain employees within the business.
  • Aims to help in the operations of the business by providing the process by handling every aspect of the business operations, which includes quality control, procurement, safety, and overall execution of the products and services to the consumers.
  • Design to organize the finance and administration department by providing all the necessary steps for all financial transactions related to the business. In addition, this system will help to identify all the key performance indicators for the business.
  • It helps the forecasting and budgeting department by providing the steps required to properly execute the company’s annual report and estimating the next two to three company financials.
  • It also helps in sales and marketing by providing the detailed requirements of all activities required for the lead generation, followed by the sales proposal and closing of the lead.
  • Its process aims to enhance information technology, which includes a detailed account of all the IT protocols, including backups, disaster recovery plans, employee details, operation details, etc.

Benefits

  • One of the major benefits of standard operating procedures is that it creates a management hierarchy and allocates each of the tasks suitable to the respective teams.
  • Allocates respective tasks properly, which helps to record and verify each data related to the company’s operation systemically.
  • For enhanced business prospects, the management needs the backdrop to find the relevant information required in each strategy for future execution.
  • The management is well aware of the business’s current scenario, which further helps them improve the existing scenario by looking at each department’s past performance and comparing it with the budgeted one.
  • During the merger and acquisition or in case of a possible takeover of the business, the management would show every department’s track record, which helps the purchaser identify the current scenario of the targeted company.
  • This process will help a start-up business and help them organize multinationals by properly systematically utilizing the resources.

How to Write Standard Operating Procedures?

  1. A proper format is needed to present it in a way that is understandable to the targeted section.
  2. The input data is required, along with the proposed strategy.
  3. The targeted audience should need to identify.
  4. We need to highlight the purpose of the standard operating procedures.
  5. The sentence construction should be made in simple language to understand the audience. One should maintain the language crisply.
  6. One should construct the sentence to represent storytelling rather than a sentence because people remember stories and can connect easily.
  7. The content has to be checked with several proofreading, rechecking of the facts and numbers, and editing if required.

Examples

Examples of SOP

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#1 – Purpose

One must describe the general purpose of the procedure, followed by the simple verification of the targeted clients.

#2 – Scope

One must mention the scope in a crisp and compressed manner so that it should be visible to all the clients in the bank.

#3 – Responsibilities and Verifications

The verification process has to be done by the relevant department, followed by the cashier and the verification team. The team has to look at the transactions and accounts of the clients properly by following the bank’s guidelines.

Why do we Need SOPs?

The requirement for additional management and documented standard operating procedures becomes obvious in growing business, which helps the company expand, establish its strategies, and train the staff to improve business prospects. In addition, it helps the company establish its goal and offerings to the customers and its upcoming business prospects and strategies in front of the investors.

Conclusion

It is a great way to communicate with customers, investors, and other third parties interested in the respective business. In addition, the management’s strategies, the upcoming business prospects, and the product pipeline are visible from Standard Operating Procedures.

Recommended Articles

This article has guided the Full Form of SOP,i.e. (Standard Operating Procedures) and its definition. Here, we discuss how to write the SOP, why we need standard operating procedures and aims, and examples and benefits. You may refer to the following articles to learn more about finance: –

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