A standard operating procedure (SOP) is the documented material comprising process details that must be adhered to for completing tasks as per industry regulations or laws, or as per a company’s own benchmarked standards to efficiently run the business and consistently meet client requirements. In other words, an SOP systemizes all processes and documents them. The SOP could include work instructions (details) and procedures (general view).

The material serves to clear employee doubts pertaining to the job and can also be used as training material for new hires. Essentially, an SOP is a “how to” document for all company processes. For instance, in a banking environment, the SOP will have a chapter providing step-by-step instructions on processing credit card applications.  

An established or multinational company will typically have SOPs for different departments or functions:

  • Operations (employee training, production line steps, equipment maintenance, etc.)
  • Finance and administration (accounts receivable, accounts payable, etc.)
  • Sales and marketing (sales quotes preparations, guarantee, warranty policies, etc.)
  • Information technology (software details, system maintenance, etc.)  
  • Legal (such as privacy policy)

Smaller companies usually don’t have SOPs. Employees in such smaller firms invariably seek solutions to their job queries or clarifications directly from the business owner or manager. However, when a company grows and its workforce sizes up, such manual guidance becomes impractical. An SOP chimes in as a replacement and details all the processes within the firm.

SOP Advantages

  • An SOP helps create an efficient and profitable business. It ensures best practice adherence and quality assurance.
  • Employees can refer to the document whenever in doubt or to make sure everything is done right.
  • Helps detect or troubleshoot issues relating to machines or processes.
  • Workers adhering to SOP will be confident about their actions being supported by the management or the industry’s best practices being followed.
  • A company with an SOP in place casts a positive impression on clients since it indicates a basic level of proper organization.

Documentation Process and Updates

An SOP must be written in simple, practical language and must take a fundamental approach. It should be reviewed periodically (at least annually) to incorporate new process alterations or updates. Clear and concise writing will make the SOP creation process less time-consuming and non-cumbersome. Generally, employees familiar with the company and its operations are directly involved in or oversee SOP creation.

There is no standard format, but if a company has SOPs created before, the fresh SOPs must follow the previous SOP layout. The earlier format could entail simple steps, a graphical or hierarchical presentation or a flowchart, or anything else. Any layout a company feels practical and easy-to-interpret is acceptable.     

SOPs must stay current, and many firms have dedicated SOPs to determine how and when the process documents must be reviewed. At times, a new SOP must be created if new equipment is installed or specific job positions or processes eliminated. Also, a mechanism must be in place to intimate or inform users about fresh SOP availability or the current SOP’s withdrawn or revised status.