In a word, yes.
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.
As Gretchen Upholt, a senior consultant at Fiscal Management Associates says, “You don’t want processes that create bloat. But it’s in people’s best interest to have policies and procedures in place that make daily decisions easy and provide internal controls.”
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?
Download FMA’s sample table of contents for a policies and procedures manual to see a range of operational topics you might cover in yours.