A carefully conceived, up-to-date manual documenting not just the rules your organization follows (i.e., your policies), but also how you follow them (i.e., your procedures), can:
- Increase your staff’s efficiency by serving as a go-to resource with best practices for completing key tasks.
- Satisfy funders who ask to see policies and procedures manuals as evidence of operational strength.
- Save you from headaches when staff members are unexpectedly unavailable (or resign!), since a manual documents how to perform critical tasks.
How do you know if your internal controls are effective? Here are three basics to aim for:
- Avoid tasking a single employee with every procedural step in an accounting cycle (e.g., the same person makes a purchase, cuts and signs the check, and reconciles the bank account).
- Clearly communicate who does what, and when, in fiscal processes. Fiscal management may be led by the finance department, but requires participation from everyone in the organization to be effective.
- Be a model of accountability. “Culture starts at the top,” says Upholt. If you exempt yourself from policies or procedures, why should your staff follow them?