Five Good Reasons for Documenting Your Procedures

You repeat your core accounting processes on a daily, weekly, monthly, and yearly basis.  For some of you, they are so ingrained, you could almost do them in your sleep.  However, that’s not the best way to handle such important tasks, even if they are routine.  ±

Here are Five Good Reasons for Documenting Your Procedures

  1. Assist with cross-training and backup. If you depend on one person to take care of your accounting every month, what are you going to do if that person leaves the company, has to stop work due to health, or worse? If processes are well documented, you at least have a fighting chance to bring someone in to continue these routines with minimal interruption.
  2. Help you discover bottlenecks and inefficiencies.  While you (or your accounting staff) may do things as “we’ve always done it”, having to document each step may point out what could be eliminated, or what may need to be added.
  3. Give you the opportunity to do the required evaluation and documentation of your internal controls (steps required by accounting standards.)
  4. Align team accountabilities by addressing the who, what, where, when, why, and how.
  5. Ensure consistency. A checklist of steps in the order they should be taken streamlines processes and helps you avoid omissions.


Here are some procedures you should document:

  • Revenue Cycle, including receivables, receipts, and collections.
  • Disbursement Cycle, including purchases, payables, and disbursements.
  • Inventory and asset accounting
  • Payroll, HR tasks
  • Month-end close, journal entry process, and financial reporting


Steps to Documenting Well

For larger organizations, there is software to assist.  For smaller companies, a manual approach works well.  I like to prepare an overall flowchart of the process to ensure I’ve captured all the related source documents and systems, then prepare a general outline of the steps to complete the process, adding a brief narrative to supplement the flowchart.  To visualize this, see the EOS process documenter.

When documenting …

  • Interview process owners and record step-by-step instruction (using a tool like Screencastify can provide a great visual aid.)
  • Source documents to the general ledger.
  • Develop an overarching flowchart.
  • Walk back thru the process steps with the process owner(s).
  • Evaluated for process alignment and efficiency – eliminate any unnecessary steps.
  • Ensure the process is followed by all.
  • Regularly reassess for alignment and improvement

While documenting, you can also ensure that

  • There is a segregation of duties of risk areas and a one over one review plan.
  • Accounting systems have access controls.
  • Your physical assets are handled in a safe and secure manner.
  • Account Reconciliations are done regularly.
  • You have competent personnel in these roles.
  • There is a structure of approval authority.

While a tedious process, documented procedures help companies become more efficient and scalable.  It is well worth the time invested in a project like this.  If I can help, contact me!