Technical article

Procedural documentation as a by-product of the organisation’s own process manual

The recording and documentation of business processes is a prerequisite for compliance with the requirements of the GoBD Procedural documentation and therefore for compliance. However, it can also bring added value to businesses beyond the legal requirements: as a prerequisite for efficient organisation and for identifying opportunities for improvement. The ICS also requires precise process documentation, which makes it significantly easier to implement.

Whereas in the past the financial accountant would still be leafing through bank statements, administration is now IT-supported. As a result, the legal requirements for compliance have also increased. Tax authorities and auditors are delving much deeper into this IT infrastructure: interfaces, systems and workflows must be documented for them – in the procedural documentation. Whilst this is mandatory under the GoBD, many companies tend to neglect it.

The Opti.Tax tool from hsp Handels-Software-Partner GmbH can map process documentation in the format required by the authorities. hsp is now working on transitioning from installed software to a web application. Staff who record processes using smartphones and tablets can use it to log in directly and enter the data into the system straight away. The web application allows them to access the data from anywhere and at any time.

Companies can cover 80 per cent of their processes using templates

hsp has developed the tool using templates from the C4B-Team GmbH & Co. KG adds. She writes process descriptions for accounting and management accounting, thereby setting a benchmark for optimal workflows and digitalisation. This makes things considerably easier for companies: the process description is an essential part of procedural documentation – and by no means a simple one.

Companies initially face the challenge of determining where best to start. The barrier to entry is correspondingly high. A process that begins, for example, with the receipt of an invoice is not complete; accordingly, a description should be based on the source processes: in other words, where does the invoice come from, and is it a purchase order or a sales order? The reverse direction must also be taken into account: what happens after the invoice is received?

At the start of the year, the templates – which contain diagrams, content and text – were incorporated into the tool. They now map out the entire business process. Companies can use the templates to document 70 to 80 per cent of their processes. The remaining 20 to 30 per cent are specific to each company and must be developed in-house.

The templates make it much easier to document processes and also include advice on digitalisation and the internal control system, the internal control system, which is required by law for companies above a certain size. It consists of technical and organisational rules designed to prevent damage within the company.

The procedural documentation is not linear; it contains loops, branches and ‘if-then’ scenarios. The guidelines are brought together in modules, texts and instructions – in this way, the procedural documentation guides the client step by step through the writing process. The end result is a compilation of information about the processes within the organisation.

Compliance: Meeting legal requirements

Compliance requires adherence to the legal requirements of the GoBD and the establishment of internal control systems: internal control systems (ICS) are mandatory for large, listed companies and advisable for small and medium-sized enterprises. In such organisations, there are often significant shortcomings.

Procedural documentation ensures compliance with statutory requirements and sets out the processes and functioning of software within the organisation, so that they can be understood by auditors.

In many growing and large organisations, it is a problem that staff have an isolated view of their own area of work. The broader the scope of tasks and the larger the workforce, the harder it becomes to maintain an overview. At a certain point, processes become inefficient because employees are unaware of the objective of their own task and the processes that come before and after it. Yet without a view of the bigger picture, work processes cannot be improved.

Process documentation offers the opportunity to combine the necessary with the useful. Organisations must record, document and present their processes; as a result, they can also use this documentation for their own purposes and derive benefits from it. In this way, compliance is not merely a cost factor, but also delivers tangible benefits.

Due to the age profile of their workforce, many companies are anticipating staff retirements and changes in personnel. Knowledge transfer must be prioritised. Process documentation helps with the recruitment of new staff: all work steps, from day-to-day tasks to annual procedures, are documented and set out, which makes it easier to train new employees. Arrangements for cover also become simpler. New staff can quickly and easily find their way around using the process map and understand which cog in the wheel they themselves represent. This makes the work meaningful and increases motivation to identify areas for improvement.

Software changes and new implementations run more quickly and smoothly when based on process documentation. It provides an overview, prevents unpleasant surprises and saves money.

In principle, process documentation is a by-product, as by analysing their processes, organisations effectively draw up their own organisational and process manual. It also allows for different perspectives at varying levels of detail and across different dimensions: from the viewpoint of management, an employee or a department.

It is important not to simply leave the QM manual to gather digital dust, thereby allowing knowledge of the company’s processes to be lost once again. Instead, all those involved should have easy access to it – and be allowed to read, comment on and improve it.

Comparability and Management Consultancy

As a result of the test cases brought by the Procedural documentation templates in Opti.Tax This enables companies to compare their own processes with those of others. They can identify similarities and differences and, on that basis, develop optimal workflows. A difference is not always a bad thing – but it can sometimes be useful to analyse and question the reasons behind and the consequences of one’s own approaches.

By documenting their processes and carrying out their own process audits, companies save money on hiring an external management consultant, whose main task is also to document processes. This stock-take usually reveals opportunities for optimisation and cost savings. Companies with the appropriate staff can do this themselves and, as a result, avoid the need for clean-up exercises and wasted effort, as they keep the optimisation process running continuously. If the necessary expertise is lacking within the company, the external perspective of a management consultant can help to get the ball rolling on a dynamic and constantly up-to-date documentation system.

Process documentation and ICS

Process documentation also helps with the ICS. It is difficult to implement the ICS without detailed process documentation. This is because the associated risks can only be identified once the steps and procedures are clear. On this basis, the next step is then the TCMS on.

Conclusion

Companies benefit enormously from having their own organisational and process manual, which enables them to continuously optimise their processes. It also makes it easy to document procedures, thereby ensuring compliance.