Excerpted from

FastTrac® GrowthVenture™

Operational Systems Example

Developing formal processes and procedures helped a technology-consulting firm develop
best practices. Their first step consisted of dividing the business into functional areas such
as sales, finance, and human resources. Then they documented processes and established
expectations for those areas. With a baseline, they could tell if they were improving. Using
this information, they have established some best practices. For example, the sales team
makes weekly phone calls in small groups, with each one taking a turn at the phone while
the others listen. By observing the others’ techniques, the salespersons have polished their
own style and have increased both the number of solid leads and client visits.
Beginning at the system level, accounting functions will be used in this example.

Operational Systems

Distribution/
Receiving Billing and Accounting Customer Product
Order Technology
Orders Collections Functions Service Production
Fulfillment

Systems Level: Identifying the operational systems of your business

Processes
Processes under the accounting functions system could include accounts payable, accounts
receivable, payroll, account reconciliation and financial reports. The Process Level illustration
shows how these processes relate to each other in the accounting function system.

Accounting Functions

Accounts Accounts Account Financial

Payroll
Payable Receivable Reconciliation Reports

Process Level: Identifying the processes under each system

Organizational processes in a business’s normal workflow generally include:

• Material processes.
• Information processes.
• Human capital processes.

© 2007 Ewing Marion Kauffman Foundation. All Rights Reserved. 

Taking Action Operational Systems Example

Procedures
Using the example, look at the Accounts Payable process and take note of the series of procedures
that make up accounts payable. You may have other procedures not listed here, but this example
includes inputting bills, making vendor payments, making credit card payments, setting up
automatic deductions, and printing payable reports as individual procedures in the process.
The illustration, below, shows a specific procedure broken down to the task level and, although
simplified, the step-by-step approach of solid operations documentation. The following illustration
is an example of the relationship between the identified procedure and its detailed tasks.

Accounts Payable

Setting Up Printing
Inputting Making Vendor Making Credit
Automatic Payable
Bills Payments Card Payments
Deductions Reports

Procedure Level: Identify the procedure under each process

Making Vendor Payments

Invoice arrives According to company

from the vendor. policy invoice is
selected for payment
to vendor within
30 days.
Invoice is checked
against the receipt
Contact vendor to for accuracy.
Paid invoices
resolve issues. are filed in vendor
hardcopy files for
future reference. NO

Is the invoice
NO
accurate? Complete A/P list
is generated and
reviewed.
YES

Invoice is entered Are all

into accounting system invoices being
for payment. paid within
the 30-day
window?

YES

Process Ends.

Procedure Level: Detailed procedure at the task level

© 2007 Ewing Marion Kauffman Foundation. All Rights Reserved. 

Taking Action Operational Systems Example

Policies
Policies are the underlying rules by which the organization lives. In the example
above, the process is accounts payable; the procedures are all those tasks that occur
under that process; and the policies are the written rules that explain why and when
the organization makes payments for each procedure, if reports are to be run and
distributed at a particular time, and other factors that relate to the procedures.
Examples of policies that directly relate to the Procedures Level illustration
might include:
• All vendor invoices will be paid within 30 days of receipt of invoice, unless
otherwise instructed by an officer of the company.
• All checks must be verified and signed by an officer of the company prior to
being mailed.

© 2007 Ewing Marion Kauffman Foundation. All Rights Reserved.