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What is a Standard Business Process?

Article Details
  • Written By: Malcolm Tatum
  • Edited By: Bronwyn Harris
  • Last Modified Date: 01 November 2016
  • Copyright Protected:
    2003-2016
    Conjecture Corporation
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Also known as a standard business procedure, a standard business process is a strategy that is considered to be common or standard in a number of business settings. Processes of this type often have to do with compliance with governmental regulations, but may also be based on long-standing traditions that have proven effective in attracting and keeping clients, or maintaining efficiency at optimum levels. In some cases, a process may over time become obsolete. When this occurs, a new process will often become the standard in a given company or industry.

In general, a standard business process functions as a step by step instruction on how to handle a given situation within a business operation. A process may be very simplistic or highly detailed, depending on the nature of that situation. It is not unusual for a standard business process to include what is known as alternative solutions, a feature that makes the process more flexible and easier to apply when uncommon factors are involved in the situation. Often, the development of standard processes is influenced heavily by the nature of the business, the culture within that business, and the ultimate goals of the individual company.

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One example of a standard business process is the use of generally accepted accounting practices when it comes to maintaining accurate financial records. In many nations, the reason for using these standard accounting practices is twofold. Following these standards makes it easier for businesses to comply with governmental requirements regarding record keeping for tax purposes. At the same time, the efficiency of these accounting methods makes it easier for the business to function, since the records provide up to date information regarding the current financial status of the business.

Many businesses also develop a standard business process when it comes to securing new clients. Typically, this involves requiring that salespeople work within specific guidelines when contacting potential customers, including defining the type of pricing that may be extended and the circumstances that must exist in order for clients to receive discounted pricing. It is not unusual for a standard business process of this type to also require that salespeople track their interaction with potential clients, as well as follow specific steps in signing up that prospect and converting the entity into an official customer.

In all situations, the purpose of a standard business process is to make sure that necessary actions are universally managed and completed by relevant employees, and that those tasks are completed in a manner that the business considers efficient in terms of cost and time management. From time to time, any standard business process should be re-evaluated to determine if the process is still yielding the desired results. As a company expands or changes in some manner, some processes may become less effective or even obsolete. When this happens, new standard processes must be developed to ensure that the company continues to operate with the highest degree of efficiency possible.

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