Why should businesses have a strategy to prevent errors and losses? When companies struggle to sustain their productivity and growth, it can directly and indirectly affect employee morale.
Human business errors have become too familiar nowadays, particularly when management has not invested in new technology. Research indicates that human errors may be the third leading cause of new businesses shutting down in the United States. Over the years, progress has been made to mitigate these errors, but it doesn’t seem enough.
Here are strategies that leaders in the business sector can implement to reduce all sorts of errors.
Leverage your employees
Motivating your employees is one of the best and most effective ways to prevent business losses. In general, when employees don’t see the bigger picture and how their contribution makes a difference in the company, they don’t care about its growth.
Remember, no matter how much money you have, your employees will always be your biggest asset. Therefore, your employees must invest in the business’s success, allowing them to pay more attention to their work. Here are ways to increase employee morale in your company:
- Career mentoring
- Frequent appreciation events for the employees
- Raises and promotions frequently based on promotions
Effective communication
One of the most significant contributors to business errors is miscommunication among employees. Leaders in professional settings, like executives and managers, should come up with initiatives to improve communication. Effective communication between teams can prevent severe financial losses and operational failures from taking place effectively.
Your employees should know that loss prevention is not something the organization takes for granted. As a CEO or director, take regular feedback from your team managers on how everyone is performing. Keep an eye on the factors that are common among all teams. More importantly, communicate regularly and remind them how vital loss prevention is.
Clear policies
Your employees need to know what you expect of them to prevent losses. It cannot be done only with a pep talk once a month but should be mentioned clearly in the company policy. A well-documented approach ensures your employees know how you expect things to be done from the very first day and what benefits they can reap if they do.
In addition, your policies should state employees’ responsibilities and how to respond in case of losses. But what if you have suffered losses in the past? In that case, you can make the necessary changes to company policy by conducting an in-depth review of the hiring procedure. Carry out additional background and reference checks, as they might help you find the best talent in the market, increasing your business performance.
Update accounting
Okay, let’s take a turn for the obvious. The majority of the errors are caused by business owners’ concerns with finances. There is no denying that businesses run on capital and investment and eventually get returns on those investments. Therefore, don’t forget to check the accounting sheets for transactions, i.e., how much went in and came out. It can take a lot of work, and you might need to hire a neutral party, like a financial auditor, to identify abnormalities in the account.
Avoiding diagnostic error
Diagnostic errors don’t just include the wrong diagnosis but also overdiagnosis, delayed diagnosis, and partial diagnosis. It is recommended that leaders involve the entire team while diagnosing business problems, emerging from entry-level employees to high-level executives. Businesses need to introduce an environment of co-creativity, where every single individual uses their expertise effectively. Proper execution of a multi-disciplinary approach can reduce the chances of error dramatically.
Root cause analysis
Root cause analysis (RCA) is a systematic approach that requires leaders to ask three questions for information collection.
- What is the problem?
- How did it take place?
- How can it be prevented in the future?
Leaders should generally follow a prespecified protocol to start with data collection and reconstruct the whole event, analyzing the sequence of events leading to that error.
Bottom Line
Successful businesses focus on improving, whether it’s their operations or employee performance. Every member of your organization must understand the importance of error reduction and loss prevention. We hope this article helped us better understand how to reduce errors.
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