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, and based on it, these documents are necessary. In the case of a growing business, the management becomes the key personnel, and he takes all the major decisions.
- As the business grows to the next level, the company starts to build its own hierarchy of management 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, which allows the company to grow, and also establish its strategies and train the staff.
- It helps to establish the strategic management of a business by providing the steps that top-level management should follow in order 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 operations of the business by providing the process by handling each and 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. This system will help to identify all the key performance indicators for the business.
- This helps in the forecasting and budgeting department by providing the steps required to properly execute the company’s annual reportCompany's Annual ReportAn annual report is a document that a corporation publishes for its internal and external stakeholders to describe the company's performance, financial information, and disclosures related to its operations. Over time, these reports have become legal and regulatory requirements. and an estimate of the next two to three company financials.
- It helps in sales and marketing, too, by providing all 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.
- 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.
- Allocation of respective tasks is done in a proper manner, which helps to record and verify each and every data related to the operation of the company in a systemic manner.
- To enhance business prospects, the management needs the backdrop to find the relevant information required in each of the strategies for future execution.
- The management is well aware of the business’s current scenario, which further helps them improve the existing scenario of the business by looking at the past performance of each department 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 the track record of each and every department, which helps the purchaser identify the current scenario of the targeted company.
- This process will help organize a start-up business and help reach them to organized multinational by proper utilization of the resources in a systematic manner.
How to Write Standard Operating Procedures?
- A proper format is needed in order to present it in a way that is understandable to the targeted section.
- The input data is required, along with the proposed strategy.
- The targeted audience should need to be identified.
- We need to highlight the purpose of the standard operating procedures.
- The sentence construction should be made in simple language so as to understand all the audiences. The language should be maintained in a crisp manner.
- The sentence should be constructed in a manner so that it represents storytelling rather than a sentence. This is because people do remember stories and can connect easily.
- The content has to be checked with several proofreading, rechecking of the facts and numbers, and editing if required.
#1 – Purpose
This general purpose of the procedure needed to be described, followed by the simple steps of verification of the targeted clients.
#2 – Scope
The scope has to be mentioned 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 in a proper manner by following the bank’s guidelines.
Why do we Need SOPs?
The requirement of additional management along with documented standard operating procedures becomes obvious in case of growing business, which helps the company to expand, and also establish its strategies and train the staff in order to improve business prospects. It helps the company to establish its goal and offerings to the customers and establishes its upcoming business prospects and strategies in front of the investors.
This is a great way to communicate with the customers, investors, and other third parties who have an interest in the respective business. The management’s strategies and the upcoming business prospects, along with the product pipeline, are visible from Standard operating procedures.
This has been a guide to the Full Form of SOP,i.e. (Standard Operating Procedures) and its definition. Here we discuss how to write the SOP, why do we need standard operating procedures and aims along with examples and benefits. You may refer to the following articles to learn more about finance –