Believe it or not, paperwork should raise productivity
Johannesburg - Following on from last month's column, this month I concentrate on the administrative side of the enterprise.
Many business owners fail to document their in-house administrative policies and procedures, leading to unsustainable management of the business and, often, its demise.
Simple tasks such as ensuring that the filing is done consistently can often mean the difference between proving that a payment has been made, thereby avoiding costly penalties and interest, and spending hours if not days looking for a document. Proper filing can save the enterprise owner from spending countless hours on an unproductive task that will not generate any income.
Complicated and cumbersome policies and procedures can affect productivity and the bottom line. The more complicated the process, the easier it is for things to be left out or, worse, for fraud to flourish.
The simpler the system, the easier it is to perform the task and maintain control. The simpler the procedure, the more transparent the transactions become, reducing the possibility of errors and the opportunities to commit fraud.
Administrative check lists should be introduced to ensure tasks are performed as and when they should be. There should be lists for daily, weekly, monthly, quarterly, semi-annual and annual tasks.
Daily tasks could include things like checking websites and newspapers for tender opportunities. A weekly list may include tasks like following up on outstanding payments, while monthly tasks would include the preparation of invoices to ensure that cash flow remains constant.
Quarterly lists would include stock takes to ensure that losses are kept to a minimum. Ensuring the timeous submission of provisional tax assessments would appear on the semi-annual check list, while annual tasks would include the preparation of budgets and archiving of documents.
A check list should specify who must perform the task and, if necessary, when it should be done. For example, the bookkeeping clerk might have to follow up weekly on outstanding monies; invoices ought to be raised on the 25th of every month.
Administrative procedures should include, but not be limited to:
n Daily filing, archiving and document retention;
n Raising of invoices and issuance of credit notes;
n Control of petty cash;
n Cash up and control of till floats and spare floats;
n Control of stock;
n Backup of data;
n Control of staff;
n Time keeping ;
n Security and safety; and
n Maintaining, updating and control of mandatory compliance procedures, administration procedures, operational procedures and human resource procedures.
Different industries require different, yet similar, procedures in the workplace.
For example, a franchise retail outlet would probably need sample stock counts and reporting every day, whereas a pub or restaurant would need a handover of stock and cash when shifts change.
A business that provides services would not need fewer stock controls, but may require additional administrative procedures for quoting and controlling of deliverables.
Even within the same industry, administrative duties would differ, say, between a warehouse and a factory.
The amount of administration is hugely affected by the number of staff, as well as whether they are permanent, part time or casual, and the frequency of wage payments.
In instances where trade unions are active in a company, administrative requirements can increase exponentially and strict control needs to be maintained to prevent unnecessary conflict and time-wasting debates.
Although many view the amount of red tape or paper work associated with policies and procedures of any kind as cumbersome and a waste of time, they are designed to remove the emotion from the process and deal with issues clearly and concisely.
If written and implemented correctly, procedures and policies can save a great deal of time and effort that could be best used in tasks that will increase sales and productivity.
Whatever your administrative needs may be, they are mostly generic, unlike many operational procedures, which can be unique to an industry.
The bottom line is: remember to always keep it simple.
Nikki Viljoen is an internal auditor and business administration specialist. She can be contacted on 083 702 8849, email@example.com or www.businessreality.blogspot.com. Next month she deals with the operational requirements of a business