The Importance of an Organizational Chart

Whether you are in the process of creating your business plan or you would just like a few tips on how to fine tune your current business operations, we can make your process less painful and possibly more inspiring.

When laying out your new business plan, filling-in the “Service or Product Line” information probably the easiest portion.  For many new entrepreneurs an exciting product line or the need for your service can be the driving force behind opening the business in the first place. But figuring out the “Organization and Management” section of the business plan can be a little more difficult to develop.

Even if you start out as a one-person business, it is a good idea to layout specific jobs and functions necessary to run your business.

  • What needs to be done and when?
  • Who is going to be responsible for each job?
  • How does each job need to be done?
  • Who is in charge?
  • How will you hold people responsible for these functions?

A simple way to plan the organization and management of your business is to create an Organizational Chart, which is a diagram of the roles and responsibilities in your organization.  It gives you a visual picture of who is doing what on a summary level.  It is crucial to define this is businesses with more than one person in order to avoid doubling-up on work, not delegating tasks, leadership problems and even hurt feelings.

An Organizational Chart is easy to create in Microsoft Word and Excel.  In both of these programs, users can click on the INSERT tab, and then click on SMART ART to locate a variety of organizational layouts under HIERARCHY. Play with the layouts and colors as you go along or if something doesn't flow right.  Changing the layout or color doesn't cause any loss of information.Create an Organizational Chart for Your Company

In a traditional hierarchy the role at the beginning or top is ultimately responsible for the success of the entire company (in this case, Joe & Sally.)  Below that office are the major departments or main responsibilities that need to be filled for the company to function.

Once you have established your main areas of work and who is in charge, you should then create a secondary chart for each department. This secondary chart will map out the job details for each department, who is involved and their job functions.

Create a Job Duties Chart

This simple tool can help keep your team on track and show you what duties need to be filled to successfully run your business. It can also help you develop processes for unexpected, transitional or temporary situations as well.  What if Sally goes out on medical leave?  Who will cover her responsibilities?  How would you know her responsibilities if they were not mapped out? Don’t let your business suffer from a lack of organizational planning.

Finally make sure each position is filled by someone willing and able to do that job.  Does it really make sense to have the partner who hates or doesn't know accounting be the one doing it?  If there is no one in the company able to fill a position, then hire someone as soon as possible to do it for you.  Your business and bank account will surely benefit from hiring capable people to successfully fill the needs of your company.  In the long run, having someone in the wrong position can cost you money.

Quality Accounting Solutions offers bookkeeping, payroll, hosted QuickBooks, and CFO services to help you run your company efficiently and effectively.  Call us today for your initial consultation.

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