Standard Operating Procedures, the Sexiest Thing in Management

Standard Operating Procedures (SOPs) may not be the most exciting topic, but clarity, communication, and dependability are all essential for feeling secure. Ask anyone in, or looking for a long-term relationship; feeling secure is sexy. That is exactly what SOPs do: create security and clarity.

What are Standard Operating Procedures?

Webster’s Dictionary defines Standard Operating Procedures (SOPs) as “established or prescribed methods to be followed routinely for the performance of designated operations or in designated situations.”

I recommend keeping an SOP as concise as possible, ideally fitting on a single page. It should be a straightforward, step-by-step guide outlining the actions needed to achieve a specific outcome. An SOP can be crafted for anything from entering an order into a point-of-sale system to interacting with a patient. The steps should be both achievable and quantifiable, making the process easy to follow.

The first step when creating an SOP is to ask yourself what questions you want answered by the document. Here are some questions to ask yourself when creating an SOP pertaining to accounts payable.

1.     How is the bill being delivered?

2.     On what date are the bills being delivered?

3.     What date should the bills be paid?

4.     Are you giving enough time for approvals and mail services, or are you sending via ACH?

5.     How are the bills reconciled?

6.     Does the reconciliation need to be signed off on, and by whom?

7.     How do you ensure every bill is paid?

An SOP should encompass answers to all these questions, making them clear so that no matter who is reconciling and paying the bills, they know how to do it step by step.

An example of an SOP for a specific vendor should look like this.

• On the 1st of the month, a statement will be sent from XXXX to XXX.com email address.

• The due date of the bill is the 15th of the month. However, the statement must be reconciled by the 8th of the month.

• Print out the statement.

• Compare the statement to the invoices received with each order. Ensure the following:

o   Do the totals on the invoice match the statement?

o   Do you have all the invoices on the statement?

o   If an invoice is on the statement and you do not have a physical copy, call the vendor for a copy.

o   Were contractual discounts given?

Find the contractual discount log in xxxx file.

o   Was the statement discount given?

o   Have all credits been applied to the statement?

• If any errors are found on the statement, please contact the vendor's Accounts Receivable department.

• After verifying the statement is correct, sign and date the statement.

• Send the reconciled statement to the Accounts Payable department for payment no later than the 8th of the month.

• Sign and date the monthly vendor checklist. 

• On the checklist, verify that you have received the statements from all vendors by the 5th of the month.

As you can see, if this SOP is followed, the bills will be paid in a timely manner. If there is a breakdown in the process, you can find it quickly and rectify it.

This method can also be used for patient service. Ask yourself questions like: How would you like the phones to be answered? How would you like your patients to be greeted in each department? Take those answers and build a process that can be followed and assessed easily. Similarly, in a manufacturing setting, an SOP could outline the steps for quality control checks at different stages of production.

Why are SOPs so important?

Remember, clarity is kindness. If your employees are not given a clear, measurable way to succeed, you cannot expect them to represent your practice in a way that demonstrates the care you want to give.

The first reason is training. Hiring and retaining employees is extremely difficult right now, and hiring someone without clear expectations makes them less likely to stay. It is much more costly to hire a new employee and train them than to effectively train your current employees. The SOP sets a foundation for your employees. Without a strong foundation, a building will crumble. The same is true for a business. SOPs allow every employee to be trained the same with the same core values.

What Do You Need Outside the SOP?

An easy method to assess if a process is being followed should be partnered with your standard operating procedures. For your SOP above, the assessment should include the following:

• Are the bills being paid by the assigned date?

• Is the Vendor payment log being completed monthly?

These questions are easy to investigate and answer. Using this method, a supervisor should not take much time to ensure their staff completes the assigned tasks and corrects issues if they occur.

The Beauty of an SOP

The beauty of SOPs lies in their ability to make management more efficient. We all strive to save time during the day, and investing a little effort in creating an SOP upfront and ensuring people adhere to the process can revolutionize your practice. Start small, seek input, and expand from there. Imagine if someone had done this for you when you started a new job. How much more secure and less frustrated would you have felt? Extend this same empowerment to your team. They will eventually appreciate it, even if they don't grasp the process immediately.