Writing an SOP to manage your inventory? Follow these six rules to ensure it's effective

Any of the following people can use SOP:

• Employees in your company. For instance, inventory controllers, debtors clerk
• Management, directors or shareholders
• Auditors
• Investors
• Any person with an interest in the process (stakeholders)

Why must you create an SOP to manage your inventory?

You need to manage and control your inventory to reduce your financial risk or the risk that customers won't be satisfied with the product they receive, says the Practical Accountancy Loose Leaf.

For example, in a manufacturing company, unaccounted inventory due to staff negligence could result in loss of inventory.

This could have a significant impact on the bottom line and push the Gross Profit margin down.

To ensure your SOP is effective, make sure you stick to these rules when you write it.

Six rules to follow when writing a SOP for your business

1. The latest copy must be available for your employees to access either in hard or electronic copy.
2. As the supervisor of the process, take ownership of this document and make sure your staff, especially new employees have access to this SOP.
3. Review the SOP regularly to ensure any changes in the process have been documented.
4. Changes should be made by the supervisor to ensure the SOP is applicable to the process and the process is streamlined.
5. All changes should be tracked and documented. Keep the outdated versions in an archive.
6. The SOP should have a document number. Also keep a register with all SOP's on it.

Following these rules will help ensure you write an effective SOP that'll help you manage your inventory well.