Growing small business and process

Business process is important

Business Processes are core to managing any growing organization. As organizations face the growth challenges, processes become the core on which these evolving businesses begin to be based to faciliate the growth, as well as the ongoing management of the organization. This statement is however made with caution, as not everything belongs in a process, but generally high volume transactions are a good place to start.

Processes combined with enabling technology, allow internal controls and audit procedures to be developed and automated, and the organization to do more, faster and more accurately with fewer resources. Processes generally start with finance but are required in fulfillment, customer service, strategy, all over the business.

The caution comes in when too many things get put into a process. Things with low transactional volumes or which only happen once a year do not always need a process. People forget the process, it is not adhered and this impacts on the process discipline in other more important areas. Getting this process balance right is important.

Once processes are identified and documented they can be used for induction, training, audit and many other purposes. It is also imperative they are reviewed and updated on a regular basis or you run the risk of the " this is the way it has always been done" syndrome.

New technology usually is an excellent opportunity to improve and implement new processes. Technology enables these new processes.

As a start, key processes to focus on, include:

P2P : Purchase to Pay: The process from requisition through to receipt and payment for goods and/ or services by a supplier or vendor
Q2C : Quote to cash: The process from first customer contact through to cash receipt for services or goods delivered

Examples of process which can be standardized and documented:

• Payables
• Receivable
• Fulfillment
• Invoicing
• Customer relationship management

Examples of processes, which might be more difficult to standarize and document:

• Annual strategy development process
• Activities to generate sales or marketing
• Management of the annual audit process

By not dealing with the process issue:

The organization runs the risk of working in ad hoc manner and making performance measurement and improvement more difficult, if not impossible.

Having the core processes, identified, documented and supported by senior management can help avoid the issue. An ongoing review of these core processes is required in growing organizations to take into account new requirements and new technology enhancements. As the organization grows, so more processes will be required.

Common traps in developing and managing processes:

• Trying to develop too many processes, too broadly and  in too much detail
• Not getting buy-in for processes and process changes 
• Lack of senior management support for processes
• No ongoing review and change method for processes in place
• Not incorporating processes into the control environment
• For more information on process and process development, visit our finance function area

Go back and continue reading about growth business challenges.