One of the main edicts of public accounting firms is: “Do your work so somebody else could follow it”. The reason why accounting firms have this credo is obvious from a workflow standpoint; they handle their clients with a team approach, with many internal employees (and at least 1 partner) having some level of periodic interaction.

Even if you’re a sole proprietor or a small business with only a few internal employees, the one thing that is important is for every entry into your agency management system to be understandable by someone outside the company (ex: Your accountant/tax preparer, an auditor) as well as inside. The main beneficiary of this will be the lower time cost for any process that intersects with your agency management system (ex: tax returns, financials, compliance documents, etc.) since ambiguity raises questions and issues, which creates a new set of prioritized deliverables (resolving the “open” questions) and slows the overall process down.

Therefore, in every process that has the potential to have outside eyes on it, make sure that your business takes the time to provide as many details as possible. When making a journal entry into your agency management system, make sure to write a description in the memo section as to why the journal entry was made…even for the most routine entries (ex: “to record monthly depreciation on computer equipment”). If your agency management system can append documents onto journal entries or payable/receivable subledger processes, do so. Don’t assume that your memory (or your staff’s memories) will be enough when asked about a particular journal entry a month, a year, or years after the fact.

Humans by default have a scarcity mindset that has been ingrained for thousands of years. Our ancestors survived by having fear influence their actions: Is this tiger starting to approach me? It's understandable that our ancient programming is still within us; humans don’t evolve that rapidly. To those still allowing their scarcity mindset to control their actions, being transparent opens yourself up to mistakes (as if we don’t all make them) and criticism so there’s this false belief model held by the employees of most companies that if you just keep your head down, don’t ask questions, and do as you’re told that your chances at “survival” in the workplace will be better than those that freely admit mistakes and are willing to take the blame.

Early in my career I interviewed for a low level accounting position and the manager that was interviewing me bragged that he had “engineered himself out of a position” at one of his former companies and at the time I thought to myself “Why would you do that, don’t you need income to survive?” Little did I realize at the time but that was my limited thought process cue to my scarcity mindset clouding accurate thoughts on the subject. What I didn't realize then was there are plenty of people that can just perform a task: you show them how to perform a series of steps or processes and then they can replicate the task every hour, every day, however long It takes to finish the task. Few employees can devise alternate workflows using existing resources to create efficiencies that free up additional labor hours to the company. Those types of employees will always be in high demand.

What's more rare are employees that can innovate, employees that can find solutions to problems instead of just following directions. You might believe that we shouldn’t expect younger employees or new hires to be able to innovate. If you have that mindset you're already at a disadvantage because while it might be difficult to train somebody to innovate, you can foster an environment of safety, defined in this case as a work environment where employees aren’t in fear of ridicule or losing their jobs for making a mistake or offering an opinion that might not be effective in the present situation. If you can provide a workplace culture that doesn’t stress punishment of mistakes at the individual level but instead stresses remediation of processes at a company level to determine the root cause of the mistake and how to avoid it in the future, then your workplace will allow employees the freedom to think differently about their tasks and foster innovation at every level.

One process that will foster innovation among your employees is to ask them to write up a procedure manual for their job. If their job is diverse, then the manual will be inclusive of every task that they do on a daily, weekly, monthly, quarterly, or annual basis. This exercise forces them to re-evaluate what they're doing and how they're performing every task. For employees that have done their jobs for so long as to be second nature the exercise seems trivial at first, but once they start to critically think about the components of each task it starts to get their creativity involved. Why are we doing a certain task or process a certain way? Is there another more effective way to perform this task that could save time/money? You can uncover hidden efficiencies by having your employees create manuals for their positions. The added benefit is that you now have a manual for every position within your company so that if an employee in a critical role suddenly leaves the company, your company has a training manual for their replacement.

What happens with a lot of small businesses is that they are stuck in the “in-between” phase of not being a sole proprietor but not having the top-line revenue to support a full-time admin staff, so they hire part-time staff for their admin roles. From the part-time employee standpoint, the small business is appealing; less formality and structure, more flexibility. The small business hires some part-time admin staff that come in a day or two a week to perform their tasks, and they are desirable employees because they typically have 15-20 years or more of experience in their field and have supervised a small staff for larger organizations so the workload at the small business is easy for them. These types of employees will balk at the idea of creating a process manual for a few reasons, one being that they are afraid that creating a manual will expose their lack of knowledge about the field and/or the company, another being the scarcity mindset controlling their actions; they fear that creating a manual for their positions will “de-mystify” their position and they will lose their sense of having a set of proprietary skills that only they can wield (“The company needs me!”), which is really just a manifestation of their ego.

Humans by default are not designed to feel safe and comfortable in every environment. You as the business owner need to set the example by not acting emotionally when problems arise, but instead to be calm and supportive. Creating a safe culture in business means to de-emphasize assignment of blame and focus on process remediation.

Encourage your staff to make suggestions on how to improve their workflow. If they feel they are in a safe working environment, they will start making suggestions. They will also understand if you don’t implement their suggestions as long as you provide your reasoning. It’s an iterative process that improves with positive feedback, so make sure to reward the process and not just the veracity of the suggestions.

Having your staff create process manuals are a great way to not only spur innovation but to also provide a safeguard for the business so that expertise doesn’t leave the building if the employee chooses to. As a side benefit, when process manuals are reviewed at a higher level, they can uncover problems (ex: document flow between departments) that might not be apparent on a day-to-day basis.