In short: Best practice guidelines are short, written rules for how your company works – from handling customer data to approving spending. Start with the policies the law expects, such as health and safety and data protection, then add practical guides for the tasks that matter most. Keep them short, share them and review them each year.
Why written guidelines help
In a new company, most rules live in the founder's head. That works until you take on staff, a partner or a contractor. Written guidelines make sure everyone does important tasks the same way, help you train people faster, and show customers, banks and investors that the business is well run.
Guidelines do not need to be long. A one-page checklist that people actually follow is better than a thick manual no one reads.
Start with what the law expects
Some policies and practices are required, or strongly expected, depending on your business:
- Health and safety: every employer must manage health and safety risks. If you have five or more employees, your health and safety policy must be in writing.
- Employers' liability insurance: if you have employees, you must usually have employers' liability insurance with cover of at least £5 million.
- Data protection: if you handle personal data about customers or staff, you must follow UK GDPR. A privacy notice and basic data handling rules are essential.
- Employment: employees must get a written statement of their main terms from their first day of work. A written disciplinary and grievance procedure is also expected.
- Anti-money laundering: some sectors, such as accountancy, estate agency and company formation, must have formal AML procedures.
If you are not sure which rules apply to your sector, ask a solicitor or HR adviser.
Choose the areas that matter most
After the legal basics, write guidelines for the parts of your business where mistakes are costly. Common examples:
- Customer service: response times, tone, how to handle complaints
- Quotes and invoicing: who can agree prices, payment terms, chasing late payments
- Spending and approvals: who can buy what, and up to what amount
- IT and security: passwords, two-step login, what to do with a suspicious email
- Records: where files are saved and how long they are kept
- Social media: who can post for the company and what is off limits
- Conflicts of interest: what staff and directors must declare
How to write a good guideline
- Pick one task or topic. Do not try to cover everything at once.
- Ask the people who do the work. They know where things go wrong.
- Write in plain English. Short sentences, numbered steps and clear owners.
- Say who is responsible. Every guideline should name a role, not just "the team".
- Include examples. Show what good looks like – a model email, a completed form.
- Keep it short. Aim for one or two pages.
- Date it and give it a version number.
Make them part of how you work
- Store guidelines in one shared place everyone can find.
- Go through them with every new starter.
- Link to them from the tools people use, such as your accounting software or shared drive.
- Lead by example. If directors ignore the rules, staff will too.
Review them regularly
Set a date each year to review your guidelines, and update them sooner if the law changes, you add a new service, or something goes wrong. Ask staff what is out of date or unclear.
Governance at board level
Best practice also applies to directors. Directors have legal duties under the Companies Act 2006, including promoting the success of the company and avoiding conflicts of interest. Good habits include:
- holding regular board meetings, even in a small company
- recording key decisions in minutes or written resolutions
- keeping statutory registers up to date
- tracking filing deadlines for accounts, the confirmation statement and tax
Common mistakes
- Copying a template from another business without changing it.
- Writing rules no one has read.
- Never updating policies after the company grows.
- Forgetting to keep records of board decisions.
How Form My Company can help
We help you keep your company's records in order. Our Resolutions and Minutes service (£100) records important decisions properly. Our Compliance and Due Diligence service (£150) reviews your company's records, and we can file your Confirmation Statement on time, every year.
Frequently asked questions
Does a small company need a written health and safety policy?
If you have five or more employees, your health and safety policy must be in writing. Smaller employers must still manage risks.
What is the difference between a policy and a guideline?
A policy states a rule or commitment, such as how you protect data. A guideline explains how to follow it day to day, often as steps or a checklist.
How often should I review company guidelines?
At least once a year, and sooner if the law changes, the business changes, or a problem shows a guideline is not working.
Do directors of a small company need board minutes?
Recording key decisions in minutes or written resolutions is good practice and helps show directors have met their duties. Some decisions must be recorded by law.