There is no shortage of costly problems that an inconsistent or nonexistent company policy can cause. Good policy can relieve your decision-makers from making inconsistent “seat-of-the-pants” decisions. It can also save you from wasting valuable time and money.
"When there’s no policy, the company is often stuck with many unprofitable repercussions, not the least of which is that the decision-maker (owner, salesperson, or estimator) becomes a kink in the hose; everything “downstream” comes to a halt until that person makes a decision," our sister publication JLC notes. "Sales, too, is affected: Without a policy, the sales process is more complicated because the same service or payment request may be altered according to gut feelings about the prospective customer, current cash-flow realities, or even whimsy."
The solution? JLC recommends introducing some consistency!
"Establishing policy and supporting procedures relieves decision-makers from making inconsistent “seat-of-the-pants” decisions. Policy-based procedures permit bookkeepers to follow a consistent process, promoting efficiency."