The Wize Way

Episode 74: Understanding Standard Operating Procedures Definition, Importance and Tools

• Wize Mentoring for Accountants and Bookkeepers • Season 1

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In this week's episode of The Wize Guys Podcast,  imagine transforming your accounting or bookkeeping practice into a well-oiled machine that runs smoothly even in your absence. Sounds too good to be true? Well, in this episode, we promise to share with you the secret sauce – Standard Operating Procedures (SOPs). We dive into the importance of having scalable, leveraged systems in place and discuss how to transition your business to operate without your constant involvement. We also explore the process of getting all that accounting knowledge out of your head and into a format that your team can leverage for success.

Did you know that the internet can be your best friend when it comes to organizing your SOPs? That's right! In the latter part of our discussion, we shed light on creating a systemised business model and discuss the seven steps of Sky's guarantee. We highlight how platforms like WizeHub can help streamline your operations, and why the internet should be your go-to place for storing policies and procedures. Finally, we talk about the importance of leadership in ensuring every task—big or small—is documented. So, gear up for an insightful episode packed with business-building tips, SOP development strategies, and the significance of having the right team in place for success.

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PS: Whenever you’re ready… here are the fastest 3 ways we can help you fix and grow your accounting firm:

1. Download our famous Wize Freedom Strategy Map for FREE - Find out the 96 projects every firm owner must implement to build a $5M+ firm that can run without them - Download here

2. Need to Hire right now? Book at 1:1 FREE hiring assessment with our WizeTalent recruiters to help find your next best employee locally or offshore – Click Here

3. Book a 1:1 Wize Discovery Session – Spend 30mins with our Wize CEO, Jamie Johns, a $7M firm owner who is ready to give you his entire business plan to build a firm that can run without you – Find out more here

Jamie Johns:

You've got to master leading yourself. So that's about self-discipline, that's about experience that's about controlling your feelings, so you've got to lead yourself.

Brenton Ward:

From Wize Mentoring is The Wize Guys Podcast, a show about accounting and bookkeeping practice owners and the many stories, lessons, and tips from their experience of transitioning from a time-pull practice to a business that runs without them. I hope you enjoy and subscribe. I wanted to talk about standard operating procedures today, so I hope you've got your questions ready. I've even received a couple in advance, which is great. But before we get started, I'd just like to give a warm welcome to all of our new members joining us today, or everyone who is coming into the clinic for the very first time. A very very big welcome to you for all the seasons.

Brenton Ward:

Pros of clinics, you know what to do throughout the clinic. Ask as many questions as you possibly can. We'd rather hear from you than talk the entire time. But before we get started, just so I know that everyone knows how to use the chat bar, because that's where we'd like you to ask questions Tell us where you're chiming into the clinic from today. What city are you in and how's the weather looking there today? Maybe you can pick us up How's the weather going?

Jamie Johns:

Today, Balarat's overcast. Yeah, to be expected. Brenton, yeah who have we got here, we've got someone from, or it's disappeared, or what?

Brenton Ward:

A lot of Aussies, of course. We've got a few from America.

Brenton Ward:

Hello from Baltimore, Jonathan, good to see you. Yeah, from Melbourne, sunny Sydney. All right, you guys know how to use the chat. Let's get rolling. Jamie, really good topic to talk about one of your favorite topics, to talk about standard operating procedures. Now I'd like to get into some nitty-gritty of it and how to really build a good platform of standard operating procedures in a practice today. But I wouldn't mind starting with a little bit of context the conversation of building an extraordinary business, building a practice that runs without you. Where does this topic of standard operating procedures? Who is that eating that nice ice cream there? I've just spotted you Looks good, Jamie. Building standard operating procedures is part of building extraordinary systems, but tell us the importance of this as a piece of the puzzle to having the practice run without you.

Jamie Johns:

Yeah, it's really critical, Brenton. It's critical to get scalability and to get leverage. Back in the early days, when I started, I used to type up how to do this, how to do that. That was the basic thing step one, step two, step three. I'm going back about 16 years now.

Jamie Johns:

So much has changed in that time, but essentially, what we're talking about is getting scalability and getting leverage, because the worst thing you can do is have all the knowledge of how to run your firm in your head. The question comes down to how do I get all that knowledge out of my head so that other people can do their job successfully, and do their job successfully without referring back to you all the time, without referring back to you as the owner all the time. It's a massive topic. Even when you're here on the internet, whether you're on Google or Facebook, whatever there's a lot of ads come up about this, about trying to scale your business with systems. There's products called training. There's all different sorts of things out there that you can use to get the knowledge out of your head so that other people can do their job successfully.

Brenton Ward:

So how important has this been for you at Sky, tell us a little bit about the journey that you've gone on to focus on this because I know this is something that you've really put a lot of emphasis on and, as a result, everyone in Wize is benefited because they're getting a lot of their standard operating procedures that you've created over the last couple of years. But tell us about how this has evolved in Sky. Like, where did you start on the journey of starting to document everything? What did that look like and what does it look like now?

Jamie Johns:

Yeah, look to probably step back even further and to give it context. It was about our business model. It was about, right from the word go, when we got a new client or when we got a new lead, how did we deal with that lead, how do we deal with that client, and what's the system and what's the process. So it goes right back to your actual business model and then progressing through the steps of winning a lead or a prospect and turning them into a client, how you onboard them, what's the onboarding process, and then working out what services you have to provide that new client, and then all the way down to how to roll out, how to roll out, how to deliver that service. And so essentially that came down to what I call our guarantee. And our guarantee sort of has around seven steps and one of those steps, without going into it, is ideally we want a client who's in the cloud and then I consider referred probably to the wise vault, brenton around step six of the wise vault, which is all about systems and processes. And so if you refer to step six, it really, particularly for a taxation public practice account, the steps in there are fundamental steps, I think, with how to deliver the services and how to keep your firm highly organised and highly systematised, down to scheduling the work, collecting the information upfront, communicating with your clients, how your pricing model works.

Jamie Johns:

So, from a larger extent, it's those fundamental steps and the business model of how you deliver your services. Then, at a more detailed level, it's about how do we deliver the bookkeeping, for example, how has a bank rec done? How do we conduct a tax planning meeting? And so in my travels that I've seen, and I've been in this position myself, where I had a lot of documents Excel documents that weren't organised, so they were all over the place, and so in my travels, I find a lot of that with firms as well. They'll have a lot of policies and procedures, but no one will be able to find them and they won't be organised in a way that it's easy to find them. Brenton.

Brenton Ward:

Yeah, so it's making the platform and that depository in a way that it becomes part of the fabric of the practice, I guess.

Jamie Johns:

Yeah.

Brenton Ward:

It's a very good way with the wisehut, which we'll touch on soon.

Jamie Johns:

Yeah, I was just going to say, and technology is a massive part of it, and I think we all started with back 20, 30 years ago. We all started with websites and we had this thing called the internet and then, over the years, we morphed to what we call an intranet, and intranet, quite some years ago now, became a real central part of how I ran my own practice at Sky, and the intranet became a central depository of how we do things, of how we conduct all the steps that we needed to to run the business. But so it's centralized on an intranet and then organizing all the SOP, standard operating procedures of how we do things. And just probably finally, Brenton, the thing to say is that Ed always used to say to me where there's not a policy, where there's not a procedure, it creates a vacuum.

Jamie Johns:

And what we mean by that is, if there's a vacuum there, well, the question is well, what fills that space? And often it could be anything. It could be the way the clients want to do that particular task or that issue, it could be the way the team members want to do it, or someone else. So you'll find that anywhere where you don't have a policy or procedure, it creates a vacuum, and the problem with that is it's not designed properly. It's any sort of goes in that space. So the more policies and procedures that you can do, the greater the leadership is. That's how we do things here and this is why we do them and watch this video. This is how we do it, so it's about leadership as well.

Brenton Ward:

I love that because when Ed started talking about creating the vacuum, it makes so much sense because it's an added incentive to actually build this into the culture of the business, because the less I know about certain things there, then it just creates a much more well-oiled machine, Even down to the small things like how the business card is looking I know you've got your own business card policy as well Rather than having to ask 20 questions each time a business card needs to be made- you can convert to that procedure, which is perfect.

Brenton Ward:

There's no task, big or small, that doesn't evade having being documented in the practice, which is great. Coming back to building that into the culture, how have you guys tried to successfully ingrain this in Sky, where the team takes responsibility for also creating those standard operating procedures? Is that the case, or are there certain people who are authorized to create a procedure? How have you guys determined that?

Jamie Johns:

Across the board. We have the freedom for anyone to create a policy and then just have it checked off by senior management. That just gives you leverage. I think the most important video that you have for a start is how to create a video and how to put it on the internet. Essentially, your most important video is a video or a policy or a procedure on how to create a video and then post it on your internet where everyone can find it. Then it brings it down to creating new habits from the firm.

Jamie Johns:

It's got to start from the top.

Jamie Johns:

It's got to start with the owners of the firm saying look, hey, Joe, can you teach such and such how to do this particular task, but while you do that, can you video it? You've got to get over yourself, and everyone has to get over themselves in terms of their voice being on a video or whether they've got the live video working as well. Then, for example, if you've got a new, you're onboarding a new employee and you've got a new system or a process or a new piece of software that you haven't used, it's important that in that hour's worth of training that you just hit the record button, Britain, you just hit and come down the practicalities of it. You can use Lume or you can use Snagit these particular tools and just do the video on the spot. It doesn't have to be perfect. A lot of people think I look silly, I sound silly on my screen, or whatever. Too many people get paralysis by analysis and they aim for perfection with the videos You'll note it, Not where they don't even get started.

Brenton Ward:

Jamie. This is one of the biggest issues. We're kind of in our own way when creating a really robust standard operating procedure library because we're concerned or fearful of those things Now with technology these days and you're going to show us how easy it is now to actually create these things, but there's just no excuse to not have them documented now because technology just makes it so easy Most of the tech free, which we'll get into some of the tools.

Jamie Johns:

I mean, for example, I was talking to a US firm a few weeks ago and he just onboarded their first offshore employee and he said that I did an hour's session showing them the US tax returns and all that sort of thing. The first question I said I did your video that. And he goes oh damn, I forgot to do that. That's where the gold is. The gold is in our own backyard. That hour's session that he had showing the person how to do the different US tax returns, that's where the gold is and that's what you can leverage off.

Jamie Johns:

The beauty of videos is you can fast forward them, you can rewind them, you can pause them and they're just gold. They're just gold. And the more that you can do that, the more it can create a culture where people say, hey, we should have a video for this, the better, and then just have a process of it getting approved and signed off on and the way you go. Then before long you will create a whole vault of videos and standard operating procedures of how to do every task literally in your firm.

Brenton Ward:

I mean in my furniture planning business. We even had a documented checklist and policy on how to make clients coffee.

Brenton Ward:

You think you wouldn't have something for those little things, but it just took questions out, it took time off at our plate and put it back onto the team. Thanks for tuning in. If you liked this episode, please remember to subscribe and leave us a five-star review. For more practical, wise tips on how to build a business that runs without you, head over to wisementoringcom forward slash podcast to download a free copy of the accountants 20-hour workweek playbook. We've included a link in the show notes below. See you on the next episode.