How to Create Standard Operating Procedures (SOPs)

A standard operating procedure (SOP) is a written, step-by-step description of how your business does a routine task. To create one, pick a task that repeats and have the person who does it write the steps in order. Next, test the draft with someone else. Then give it an owner, a version number and a review date. The US Environmental Protection Agency (EPA) defines an SOP as "a set of written instructions that document a routine or repetitive activity followed by an organization."

Billed publishes this page. The EPA quotes come from the April 2007 edition of its Guidance for Preparing Standard Operating Procedures (EPA QA/G-6), a US federal guide written for organizations with EPA quality systems. It's quoted here as practical guidance, not as a rule your business has to follow. Sources were opened on October 30, 2026.

Step 1: choose which processes to document

Start with tasks that repeat and where a mistake costs money or upsets a client. Examples include sending invoices, onboarding a new client and closing the month's books. Write one SOP per task, and keep a single list of all your SOPs with each one's number, version, date and owner.

Step 2: have the person who does the work write it

The EPA guidance says: "Those SOPs should then be written by individuals knowledgeable with the activity and the organization's internal structure." On style, it says: "SOPs should be written in a concise, step-by-step, easy-to-read format."

In practice:

• write each step as one action, starting with a verb;
• put the steps in the order they happen;
• name the tool, file or form used at each step;
• mark any step that can't be undone, such as sending a payment.

Step 3: use one structure for every SOP

Each SOP can include:

• Title, number, version and date, so readers know which copy is current;
• Purpose and scope: why the task exists and which cases it covers;
• Who does it and what access they need;
• Steps, numbered in order;
• Checks to finish before the task counts as done;
• Exceptions: what to do when something doesn't fit, and who to ask;
• Records: what to save and where;
• Owner and next review date.

The guide to organizing business files covers where to keep SOPs and the records they create.

Step 4: test it with someone else

Ask a colleague to follow the draft without help, note every question they ask and add the answers to the SOP. The EPA guidance says: "It is especially helpful if draft SOPs are actually tested by individuals other than the original writer before the SOPs are finalized."

On detail, it says: "SOPs should be written with sufficient detail so that someone with limited experience with or knowledge of the procedure, but with a basic understanding, can successfully reproduce the procedure when unsupervised."

Step 5: assign an owner and review it

Name one owner for each SOP who updates it when the task changes. The EPA guidance says that "whenever procedures are changed, SOPs should be updated and re-approved." It also says: "SOPs should be also systematically reviewed on a periodic basis, e.g. every 1-2 years, to ensure that the policies and procedures remain current and appropriate, or to determine whether the SOPs are even needed."

When a task stops, retire its SOP. The EPA guidance says: "If an SOP describes a process that is no longer followed, it should be withdrawn from the current file and archived."

Once an SOP works by hand, the guide to automating business tasks covers which steps to automate.

Sample SOP: sending monthly invoices to hourly clients

This is a sample SOP for an invented business, with invented figures. Adapt it to your own process.

SOP INV-01: Send monthly invoices to hourly clients. Version 1, dated October 30, 2026. Owner: office manager. Next review: October 2027.

Purpose and scope: send each hourly client an accurate invoice for the previous month's work by the third business day of the month. Retainer clients are billed by recurring invoice and aren't covered here.

Steps:

1. Export last month's approved timesheet for each hourly client.
2. Create the invoice using the hours from the timesheet and the client's agreed hourly rate.
3. Check the total against the timesheet. For example, 12.5 hours × $80.00 an hour = $1,000.00.
4. Check the client's billing email, purchase order number and payment terms.
5. Send the invoice and record the date sent in the client's file.

Checks: a second person reviews each invoice of $1,000.00 or more before it's sent, so the example invoice in step 3 gets a second check.

Exceptions: if the hours look wrong or a client questions an item, stop and ask the owner before sending.

Records: save a copy of each invoice and its timesheet in the client's folder.

Why records matter (US): IRS Publication 583 says: "Supporting documents include sales slips, paid bills, invoices, receipts, deposit slips, and canceled checks." On how long to keep records, it says: "Generally, this means you must keep records that support an item of income or deduction on a return until the period of limitations for that return runs out." Rules differ outside the US. Ask your accountant how long your business should keep its records.

Where Billed fits

For the retainer clients in this sample, Billed's recurring invoices page says: "Invoices are created automatically and sent to your customers according to your settings." It also says: "Auto send invoices or save them as draft to recheck and send later."

Related Articles

• How to Automate Business Tasks (Without Chaos)
• How to Delegate Tasks Effectively as a Small Business Owner
• How to Organize Business Files and Documents
• Recurring Invoices: How to Set Them Up, With a Worked Example

Frequently Asked Questions

What is a standard operating procedure?

It's a written, step-by-step description of how a routine task is done. The US EPA's SOP guidance defines it as "a set of written instructions that document a routine or repetitive activity followed by an organization."

Who should write an SOP?

The person who does the task, with someone else testing the draft. The EPA guidance says SOPs "should then be written by individuals knowledgeable with the activity and the organization's internal structure."

How detailed should an SOP be?

Detailed enough that someone new to the task can follow it alone. The EPA guidance says SOPs "should be written with sufficient detail so that someone with limited experience with or knowledge of the procedure, but with a basic understanding, can successfully reproduce the procedure when unsupervised."

When should SOPs be reviewed?

Update an SOP whenever the task changes, and review it on a set schedule. The EPA guidance gives this example: "SOPs should be also systematically reviewed on a periodic basis, e.g. every 1-2 years, to ensure that the policies and procedures remain current and appropriate, or to determine whether the SOPs are even needed."

How long should I keep the records an SOP creates?

For US federal tax purposes, IRS Publication 583 says: "Generally, this means you must keep records that support an item of income or deduction on a return until the period of limitations for that return runs out." Rules differ outside the US, so ask your accountant.