how best practices work
best practices serve as a general framework for a variety of situations for instance in businesses that produce physical products best practices that highlight efficient ways to complete tasks might be given to employees best practices lists may also outline safety procedures in order to minimize employee injuries for corporate accountants the generally accepted accounting principles gaap represent best practices gaap is a common set of accounting standards which aim to improve the clarity consistency and comparability of the communication of financial information gaap facilitates the cross comparison of financial information across different companies within the same sector this benefits investors and the companies they invest in by promoting transparency 1investment managers may follow best practices when handling a client s money by prudently investing in a well diversified portfolio and adhering to a client s risk tolerances time horizons and retirement goals corporate governance or a code of ethics can serve as best practices for an organization special considerations best practices is a term that can be applied broadly and across a swath of industries in the world of business the phrase is used in connection with everything from project management to audit functions to explain the most efficient method of completing a business task with the advent of newer quality control systems came the need for a way to apply measurable benchmarks and communicate ways to rapidly implement new standards of excellence across an organization this is done by identifying problems quantifying their frequencies cultivating solutions and monitoring the execution of those solutions to ensure they solve the issues at hand best practices can also be used as a benchmark where one company can share actionable solutions with other organizations say there s a firm well known for its best in class product distribution infrastructure when asked to precisely describe the best practices that led to their hyper efficiency the company reveals that it outfits all fulfillment staffers with red markers that they may use to sign off on their highest priority deliveries consequently all red ink orders are given higher levels of scrutiny than others as more eyes reflexively search for errors when they see red ink more mistakes can be flagged and corrected although companies share their best practices as a matter of routine revealing trade secrets that might be easily replicated by the competition would be unwise steps for developing best practiceshere are eight steps for developing best practices examples of best practicesjust in time jit is a best practices solution focused on inventory that seeks to align materials ordered from suppliers to a production schedule the goal of jit is to ensure efficiency and reduce waste by only receiving materials when needed while this trims inventory costs it requires businesses to forecast demand for their goods accurately to ensure proper amounts of supplies are on hand kaizen is a japanese management philosophy that seeks to improve productivity gradually and methodically it is a japanese word that means change for the better or continuous improvement kaizen seeks to involve all employees and improve operations on a continuous basis characteristics of kaizen include designing a workplace to be more efficient and impactful by creating a team atmosphere improving everyday procedures making sure employees are engaged and seeking to make jobs more fulfilling safer and less tiring best practices for investorswith so many stocks to choose from it can be hard to know which one to pick for your portfolio in choosing a stock it s important to know what you want your portfolio to look like and to keep that in mind as time goes by as an investor it s critical to be aware of daily news not only for the companies you are analyzing or have already invested in but also for world and financial news as these impact stocks as well reading the news is probably the first step in deciding what stock to pick understanding which companies are trending what sectors are primed to do well and where the economy is heading will give you an idea of where to start looking from there start compiling a list of stocks that interest you for example if you read that new technology has emerged that has made another product obsolete for example smartphones making traditional landlines obsolete you may start looking into such companies you can find stocks through research of who the main players are in the sector you are interested in conversely you can look at exchange traded funds etfs that invest in the sector you can also use screeners to sort through companies based on a variety of factors such as market cap and earnings from there a detailed analysis of a company s financial statements would provide you with information you need regarding the company s health 