Businesses run on processes, policies and actions; business documents are how we manage and keep track of it all.
This form of visual communication ensures we're:
- Following the right procedures.
- Maintaining regulatory and legal compliance.
- Training our teams properly.
- Giving our customers important intel.
- Keeping track of company data.
And still, 55 percent of employees state that their company struggles to make the necessary documents available to their employees.
Let's dig into the types of business documents your employees need, why they're so important and how to write and share them effectively.
What are business documents? (Definition)
Business documents are all the papers, reports, files, letters and records that are related to the various company activities.
They can cover information across all aspects of the business — such as:
- Standard operating procedures (SOPs).
- Financial transactions.
- Lead and customer behavior data.
- Meeting minutes.
- Employee and vendor agreements.
Business documents offer snapshots of your organization's internal and external workflows. This makes it so much easier to manage processes, whether you're running a long-time company or starting a new business.
Benefits of business documents
Business documents are a single source of truth, both during everyday operations and potential conflicts.
Here are the top four advantages of prioritizing creating business documents:
- Speeds up onboarding and training.
- Provides corporate governance.
- Ensures credibility.
- Protects business integrity.
1. Speeds up onboarding and training
Onboarding and training without business documentation isn't just inefficient. It means the HR team won’t have time to focus on higher-value tasks that directly impact the company’s bottom line.
By creating training materials such as:
- Work instructions or job aids.
- Standard operating procedures.
- Training manuals.
- Onboarding checklists.
- Instructional videos.
... you can fast-track the onboarding process, ramp up employees and give your HR team time to focus on operations.
Training documents allow employees to learn more about processes and activities at their own pace. They can come back to the training documents and read through as needed, increasing their efficiency and independence.
2. Provides corporate governance
Corporate governance refers to all the rules and processes followed by a particular organization.
Business documents can clearly define the organization’s corporate governance. This maintains transparency among shareholders.
Other important business documents, like company bylaws, outline rules that govern the company's day-to-day.
Apart from explaining corporate hierarchy so new employees know who to contact while facing an issue, they provide key information on audits, fundraising, meetings and elections for the board of directors.
3. Ensures credibility
Imagine you had to research the benefits of a product roadmap. You come across two articles — one published several years ago, while the other is relatively new. Which one would you trust more? The recently published one, of course!
Similarly, if your business documentation is up-to-date and comprehensive, it shows stakeholders that they can trust your organization. It opens doors to lucrative contracts and collaboration.
These documents also provide investors and financial auditors with much-needed information about the company's performance and history. You stand to gain immense profit with thorough business documentation.
4. Protects business integrity
Ask any business owner, and they’ll tell you that safeguarding the company’s reputation is always a top priority.
By implementing business documentation, you’re ensuring a procedure is in place for any and every situation. This makes firefighting much easier while enabling proactive thinking at the same time.
Another thing to keep in mind is that business documentation is the lifeblood of any business. It lists out identifying attributes like mission statements, founding philosophies, financial statements and future plans.
If anyone is curious about the company, simply send a pitch deck over. This helps them learn more about the company’s value and boosts your reputation.
Types of business documents
There are a host of business documents used today — each serving a vital end-to-end purpose.
While the documents you use will vary based on your industry, company size and stage, here are five examples of business documents that most companies need.
1. Process documents
Whether you're building formal procedures or a simple workflow checklist, business process documentation protects institutional knowledge, helps your team work faster and prevents costly mistakes.
Today, forty-nine percent of employees spend up to two hours every day trying to find the information they need to do their jobs.
By building and sharing process documents, you can save employee time, increase productivity and even strengthen retention.
Common types of process documents are:
- Standard operating procedures (SOPs).
- Step-by-step or how-to guides.
- Training manuals.
- Process maps or flowcharts.
2. Financial documents
Eighty-two percent of businesses fail because of cash-flow problems. This is often due to mismanagement, not a lack of revenue.
Finance management documents are key to keeping things in line. They track cash flow, income and expenditure.
They help business leaders and senior management make data-backed business decisions that help in organizational growth.
Well-maintained financial documents can also help resolve issues quickly.
Whenever a problem arises, an accountant can analyze months of documented data and zero in on financial discrepancies and leaks.
Common types of financial documents include:
- Profit and loss statements.
- Income and financial statements.
- Balance sheets.
- Accounts receiveable/payable.
- Tax returns.
2. Business reports
Business reports contain all the information investors and stakeholders need to know about how a business operates.
Senior executives and managers use them to make informed decisions that are aligned with the company’s goals and values. These reports generally include sales figures, case studies and other forms of operational data.
Typically, we see analysts create these reports by analyzing various business departments like finance, marketing, and investor stock. Based on their findings, they draw up conclusions that help develop budgets, future forecasts and marketing strategies.
Common types of business reports are:
- Analytical reports.
- Progress reports.
- Explanatory reports.
- Informational reports.
3. Human resource (HR) business documents
As the name suggests, employee agreement contracts ensure employees follow and respect company policies. In this way, most HR documents bridge the gap between employees and the corporation.
Hiring managers lay out clearly defined employment terms to help new hires understand their role in the organization.
Companies also use documents to explain what employees will get from the company in exchange for their services. These documents outline the benefits, rights and duties of each employee.
Common types of HR documents are:
- Employee stock option agreement.
- Employment contract.
- Performance appraisal document.
- Employee handbook.
💡 Related resource: How SOPs are used in Human Resources
4. Company bylaws
Company bylaws are one of the first documents created for a company. They contain information about the company's governing bodies—the board of directors and senior management.
The document also establishes the company's purpose and why it was built. Investors can use this to understand the company’s values, ownership dynamics and standard operating procedures.
As years pass, the company structure will inevitably change. Bylaws also have rules for amendments. A board member can raise an issue in the company's workflow. Then, board members meet to decide how to amend the bylaws.
Here are the must-have components of company bylaws:
- Statement of purpose.
- Information about the board of directors.
- Shareholder information.
- Guidelines on how to handle conflict of interest.
- Guidelines on how to amend bylaws.
How to write effective business documents
With such a vast array of business document types, it can be hard to nail down how to get it all done.
Here are some standard practices to keep in mind.
1. Build a knowledge base
Make sure that your business documentation is organized and, most importantly, accessible
PricewaterhouseCoopers states that 7.5 percent of all paper documents are either misplaced or lost. Imagine having an important contract or agreement in that pile.
By creating a knowledge base, you can easily store, organize and search for your documentation.
This also reduces the need for storage space, except for your computer RAM.
2. Identify your core functions
There are types of business documents that every company needs, like bylaws and financial statements.
But other documentation depends on your business type, function and outputs. Take a look at your organizational needs, then create a checklist of what documents are required. Use your knowledge base to build folders for different departments.
3. Connect with experts
Business documentation isn't a place to cut corners. Work with external professionals and your internal subject matter experts to make sure that your documentation is accurate and compliant.
This might mean working with lawyers to review contractual documentation or connecting with your go-to people to construct standard operating procedures.
4. Use automation and tools
Take advantage of the software available to help you create and templatize your documents.
For example, Scribe is an AI-powered tool that documents your processes for you. It generates visual step-by-step guides by following along as you work. Each guide automatically comes with text, links and annotated screenshots.
This lets your go-to people create and share process documentation in seconds.
Another example of a great tool to use is BambooHR, which provides you with checklists, an employee record database and even e-signature functionality for all of your onboarding business documentation.
5. Prioritize security
Document security is one of the most important aspects of any successful business.
The risk of a breach could lead to major costs — and even loss of business. In 2022 alone, companies lost $4.35 million to attacks.
Make sure that your knowledge base and other documentation tools have the right functions in place to prevent a breach. For example, Scribe is SOC II compliant and uses the OpenAI LLM APIs that strictly limit data usage. This means that whoever uses the process documentation tool knows that their data is secure.
6. Create templates
Once you've built your initial business documentation, you can templatize and store for future use.
For example, after you've created contracts for employees, vendors or customers, you can easily create a template that removes personal information — so all you need to do is update names and dates the next time around.
Make a folder in your knowledge base to house all templates, then organize the templates into files sorted by department or function.
7. Schedule audits or regular feedback
As your operations or regulations evolve, you want to make sure that your business documents are up-to-date.
Schedule regular reviews with your experts, and be sure to add the dates and version number so that you can confirm you're working with the newest document.
It also helps to have a documentation tool with feedback functionality. Scribe lets employees add feedback directly into the documents, so you can easily incorporate updates to match your processes. It also allows for verification and approvals so you can easily track and manage changes.
Conclusion: Business documentation
Business documents are among the most important aspects of any company's operations. They lay the groundwork for how your teams function and ultimately succeed.
Make sure you effectively write business documentation by building a knowledge base, leaning on experts and taking advantage of the software and automation designed to create and manage your team's documents.