Internal Processes: How to Document & Improve Them

I still remember the exact moment I realized our internal processes were costing us actual money.

It was quarter-end at my first startup. Our sales team was scrambling to close deals. Our finance team needed updated pipeline data. And our customer success team was waiting on contracts to start implementations.

Everyone was asking me for updates. Because I was the only one who knew where everything lived.

We had 21 employees. We'd raised $15.5 million. And we were running the company like a corner store because we never bothered to document most of our processes.

That quarter, we missed our revenue target. Not because we couldn't close deals. But because our internal chaos slowed everything down just enough to push contracts into the next quarter.

I'm Yuval Karmi, founder and CEO of Glitter AI. Today I'm going to walk you through everything I wish I'd known about internal processes back then. How to document them, improve them, and actually get your team to follow them.

What Are Internal Processes?

An internal process is how work gets done inside your company. It's the sequence of steps that transforms inputs into outputs.

When someone submits a vacation request, there's a process for approving it. When a lead fills out your contact form, there's a process for following up. When an employee needs access to software, there's a process for provisioning it.

Most companies have hundreds of internal processes. Some are documented. Most aren't.

Internal Process vs. Standard Operating Procedure

People use these terms interchangeably, but there's a subtle difference:

An internal process is the actual workflow - what happens, in what order, involving which people.

A Standard Operating Procedure (SOP) is the documented version of that process - the written instructions for how to execute it. I've written a complete SOP guide if you want to dive deeper.

Every internal business process should have an SOP. But not every company bothers creating them. That's where the problems start.

Why Internal Processes Matter More Than You Think

Here's a stat that surprised me: according to IDC, companies lose 20-30% of their annual revenue due to inefficient processes and poor knowledge management.

At first, I thought that was correlation, not causation. Obviously successful companies have more resources to document things, right?

Then I dug deeper. Turns out process documentation isn't a result of success. It's often a driver of it.

The Real Impact of Good Internal Processes

1. Consistency and Quality

When everyone follows the same process, you get predictable results. No more "well, that's how I do it" creating five different versions of the same workflow.

At my first startup, we had three people handling customer onboarding. Each one did it completely differently. Our customers had wildly different experiences depending on who got assigned to them. Some loved us. Others were confused from day one.

Once we documented a single onboarding process, our customer satisfaction scores went up 23% in two months. Same people, same product. Just consistent execution.

2. Faster Onboarding and Training

I used to spend hours training new hires. Shadowing them. Answering the same questions over and over.

"Where do I find that report?" "How do I submit expenses?" "What's the approval process for this?"

After documenting our core processes, onboarding time dropped from three weeks to one. New hires could reference the documentation instead of interrupting someone every ten minutes.

3. Scalability

This was the big one for me. You cannot scale a company that runs on tribal knowledge.

When processes live in people's heads, you hit a ceiling. You can only grow as fast as you can personally teach new people. And every person who leaves takes knowledge with them.

Documented processes break that ceiling. They let you scale beyond yourself.

4. Process Improvement

You can't improve what you can't see. When processes are undocumented, inefficiencies hide in plain sight.

We had a process for generating customer contracts that took five days. Five days! After we documented every step, we realized three of those days were just the contract sitting in someone's inbox waiting for review.

We adjusted the process to include automatic reminders. Contract generation time dropped to under 24 hours.

5. Compliance and Risk Management

Depending on your industry, documented processes aren't optional - they're legally required.

But even if you're not in a regulated industry, internal processes protect you. When someone does something that creates liability, you need to know whether they followed your documented procedure or went rogue.

Types of Internal Business Processes

Not all processes are created equal. Here are the main categories:

Operational Processes

These are the workflows that deliver value to customers. They're the core of what your business does.

Examples:

• Order fulfillment
• Customer support tickets
• Product development workflows
• Service delivery

At my first startup, our core operational process was implementing customers on our platform. Everything else supported that.

Management Processes

These processes govern how the business runs. They don't directly serve customers, but they make sure everything else works.

Examples:

• Strategic planning
• Performance reviews
• Budget approval
• Goal setting (OKRs, KPIs)

Support Processes

These workflows support the people doing operational and management work.

Examples:

• IT support requests
• HR onboarding
• Expense reimbursement
• Payroll processing

The mistake I made early on was only documenting operational processes. I thought support processes were "too simple" to need documentation.

Then our HR person quit, and nobody knew how to process a new hire. We had an engineer starting in three days, and we couldn't even figure out how to get them a laptop.

Document everything that happens more than once.

How to Document Your Internal Processes

After years of trial and error, here's the approach that actually works:

Step 1: Map What You Have

Start by listing all your critical processes. Don't document them yet - just identify them.

Ask yourself:

• What workflows happen weekly or more often?
• What processes cause confusion or errors?
• What would break if the person who knows it best quit tomorrow?
• What processes involve handoffs between teams?

At my first startup, I literally walked around the office and asked people: "What do you do every day?" Their answers became my list.

Step 2: Prioritize Ruthlessly

You can't document everything at once. I tried. I burned out.

Prioritize based on:

• Frequency: How often does this happen?
• Impact: What's the cost of getting it wrong?
• Dependency: How many people need to know this?
• Risk: Is this a compliance issue?

Start with high-frequency, high-impact processes. Document those first.

Step 3: Observe the Process in Action

This is critical. Don't document how you think the process should work. Document how it actually works today.

Shadow the person who does it best. Record a screen share. Ask them to narrate what they're doing and why.

You'll be surprised how different reality is from what you imagined.

Step 4: Document Step-by-Step

Now you're ready to write. Here's the format that works:

Process Name: Clear and searchable Purpose: Why does this process exist? Scope: What's included and excluded? Roles: Who's involved and what do they do? Steps: The actual workflow Troubleshooting: Common problems and solutions

For the steps themselves:

• Use active voice and present tense
• One action per step
• Include screenshots for anything visual
• Highlight decision points
• Note timing expectations

Bad example: "The manager should review and approve or deny the request"

Good example: "Review the request in the HR portal. Check that all required fields are complete. If approved, click 'Approve' and the employee receives automatic notification within 5 minutes. If denied, click 'Deny' and add a reason in the comments field."

Step 5: Test with a Real Human

Here's where most documentation fails. People write it and publish it without testing.

Find someone who's never done this process. Hand them your documentation. Watch them try to follow it. Don't help unless they're completely stuck.

You'll discover all the steps you forgot to include. The screenshots that aren't clear enough. The jargon you didn't explain.

Fix those gaps before you publish.

Step 6: Make It Accessible

Documentation that nobody can find is documentation that doesn't exist.

Store your processes in a central location. Notion, Confluence, Google Drive, SharePoint - doesn't matter. Just pick one place and stick with it.

Use clear naming conventions. Organize by department or function. Create an index so people can find what they need.

At Glitter AI, we keep all our internal processes in our own product. (Yes, we eat our own dog food.) Every process is tagged, searchable, and linked to related guides.

Step 7: Assign Ownership

Every process needs an owner. Someone responsible for keeping it updated.

When processes change, the owner updates the documentation. They review it quarterly to make sure it's still accurate.

Without ownership, documentation rots. I've seen SOPs that reference software the company stopped using three years ago.

How to Improve Your Internal Processes

Documentation is step one. Improvement is where the real value comes.

Process Analysis Framework

Once you've documented a process, analyze it:

1. Identify Bottlenecks

Where does work slow down or pile up? That's your bottleneck.

In our contract generation process, the bottleneck was review. Contracts sat in someone's inbox for days.

Solution: We added automated reminders and visibility. Everyone could see where contracts were stuck. Suddenly bottlenecks cleared.

2. Eliminate Waste

Look for:

• Redundant steps: Are we doing the same thing twice?
• Unnecessary approvals: Does this really need three sign-offs?
• Manual work: Could we automate this?
• Waiting: Why are things sitting idle?

We had a process where someone manually copied data from our CRM to a spreadsheet, then another person copied from that spreadsheet into our billing system.

Two people, multiple hours per week. We built a simple integration and eliminated both steps entirely.

3. Reduce Handoffs

Every time work moves from one person to another, there's friction. Things get dropped. Context gets lost.

Try to keep related work with the same person or team. If handoffs are necessary, make them explicit and documented.

4. Automate Repetitive Work

If a step is:

• Repeatable
• Rule-based
• High-volume

...then you should automate it.

We automated our customer onboarding emails. What used to take someone 20 minutes per customer now happens automatically. Same quality, zero time investment.

Continuous Improvement Culture

Process improvement isn't a one-time project. It's ongoing.

At Glitter AI, we have a simple practice: anyone can suggest a process change. You don't need permission. You just need to:

1. Document the current process
2. Propose a specific change
3. Test it with a small group
4. Share results

If it works, we update the documentation and roll it out. If it doesn't, we learned something.

This creates a culture where everyone is looking for ways to work smarter.

Common Internal Process Mistakes

Let me save you some pain by sharing the mistakes I've made:

1. Making Processes Too Rigid

Early on, I created processes that were so detailed and inflexible that people found them annoying.

"You MUST use these exact words in this email." "This approval MUST happen before that step."

People started ignoring the processes because they got in the way of getting work done.

Good processes have guardrails, not straightjackets. Define the required outcomes and critical steps. Let people use judgment for the rest.

2. Documenting in a Vacuum

I used to sit in my office and write process documentation based on how I thought things should work.

Then I'd publish it and wonder why nobody followed it.

Turns out people don't trust processes they weren't involved in creating. Involve the people who actually do the work. They'll catch problems you'd never see, and they'll be more invested in following the final version.

3. Never Updating Documentation

I documented our hiring process in 2019. By 2021, we'd changed our ATS, our interview structure, and our offer approval chain.

But the documentation still referenced the old way. New hires followed it and got confused. Hiring managers ignored it because it was wrong.

Set calendar reminders. Review and update documentation quarterly at minimum.

4. Documentation Without Training

Just because you documented something doesn't mean people know it exists or how to use it.

When you create or update a process, announce it. Walk people through it. Answer questions.

We now do a 15-minute "process walkthrough" whenever we publish new documentation. Attendance is optional, but we record it for people who can't make it.

5. Perfection Paralysis

I've seen people spend weeks creating the perfect process document. Beautiful formatting. Comprehensive detail. Every edge case covered.

Meanwhile, people are still confused about how to do the actual task.

Done is better than perfect. Create a basic version, publish it, and improve it based on feedback.

A decent process document that exists beats a perfect one that's still in draft.

Tools for Internal Process Management

You've got options. Here's the landscape:

Basic Documentation Tools

Google Docs/Notion/Confluence: Free or cheap, collaborative, good for small teams. The downside is they're general-purpose tools, not built specifically for process documentation.

Microsoft Word/SharePoint: Standard in many enterprises. Works fine if you're already in the Microsoft ecosystem.

Dedicated Process Tools

Process Street: Built for checklists and recurring workflows. Good if your processes are repetitive.

Trainual: Focused on training and onboarding. Works well for creating playbooks.

SweetProcess: Dedicated to SOPs and procedures. Simple interface, does one thing well.

Visual Process Mapping

Lucidchart: Great for creating flowcharts and process maps. Helps you visualize complex workflows.

Miro: Collaborative whiteboarding. Good for mapping processes with your team.

AI-Powered Documentation

This is where I'm obviously biased, but also where I think the future is.

Traditional documentation is slow. You do the task, then you spend hours writing about it, taking screenshots, formatting everything.

With Glitter AI, you just do the task while talking through it. The AI captures your screen as screenshots and converts your narration into written steps.

What used to take me 3-4 hours now takes 15 minutes.

I built Glitter because I was tired of spending my weekends documenting processes instead of building my company. If you're in the same boat, give it a try.

Real Examples of Internal Process Improvement

Let me share some actual results from companies that got serious about internal processes:

Example 1: Customer Onboarding

Before: Ad-hoc onboarding. Each customer success manager did their own thing. Customers took 4-6 weeks to go live.

After: Documented standard process with checklists and automated emails. Onboarding time dropped to 2 weeks. Customer satisfaction scores increased 31%.

Example 2: Expense Reimbursement

Before: Email receipts to finance, wait for manual review, wait for approval, wait for payment. Average time to reimbursement: 3 weeks.

After: Documented process with clear submission requirements and automated workflow. Finance team could process requests same-day. Time to reimbursement: 3 days.

Example 3: IT Support Requests

Before: Email IT with issues. No tracking, no prioritization. Critical issues got buried. Average resolution time: 4 days.

After: Implemented ticketing system with documented triage process. Critical issues flagged automatically. Average resolution time: 8 hours.

Example 4: Sales-to-Delivery Handoff

Before: Sales closed deals, then verbally explained them to delivery team. Context got lost. Implementations started with confusion.

After: Documented handoff process with required information checklist. Sales fills out template during deal. Delivery receives complete context. Implementation errors dropped 67%.

The pattern is consistent: document the process, identify bottlenecks, make targeted improvements, measure results.

Getting Started with Your Internal Processes

If you've read this far, you know internal processes matter. The question is what you're going to do about it.

Here's my challenge to you:

Pick one internal process this week. Not ten. Just one.

Choose something that:

• Happens frequently
• Causes frustration
• Could be done better

Document it. Follow the steps I outlined above. Test it with someone on your team. Publish it.

See what happens.

I bet you'll find inefficiencies you didn't know existed. You'll get questions you didn't anticipate. And you'll realize how much easier it is to improve something once it's written down.

Then pick another process next week.

That's how you build a company that runs on systems instead of chaos. One process at a time.

Free SOP Template to Get Started

Want a head start? I've put together a template you can use:

Internal Process Documentation Template

Process Name: [Clear, searchable title]

Purpose: [Why this process exists - what problem does it solve?]

Scope: [What's included and what's excluded]

Frequency: [How often this process runs]

Owner: [Who's responsible for this process]

Roles Involved:
- Role 1: [What they do]
- Role 2: [What they do]

Prerequisites:
- [What needs to be in place before starting]

Steps:
1. [First action - be specific]
   - Screenshot or visual aid
   - Expected outcome
   - Timing

2. [Second action]
   - Screenshot or visual aid
   - Expected outcome
   - Timing

[Continue for all steps...]

Decision Points:
- If [condition], then [action]
- If [condition], then [alternative action]

Common Issues and Solutions:
- Problem: [What goes wrong]
  Solution: [How to fix it]

Related Processes:
- [Link to related documentation]

Last Updated: [Date]
Next Review: [Date]

Copy this. Fill it out. Start documenting.

Frequently Asked Questions

What is an internal process and why does it matter?

An internal process is the sequence of steps that defines how work gets done inside your company - from vacation request approvals to lead follow-up to software provisioning. According to IDC, companies lose 20-30% of their annual revenue due to inefficient processes, because undocumented processes create inconsistency, slow down onboarding, limit scalability to tribal knowledge, hide inefficiencies from improvement efforts, and expose you to compliance and liability risks. The difference between a $1M company and a $10M company often isn't the product - it's whether operations run on documented systems or chaos.

How do you identify which internal processes to document first?

Prioritize processes based on four factors: frequency (how often it happens), impact (the cost of getting it wrong), dependency (how many people need to know this), and risk (whether it's a compliance issue). Start by asking: "What would break if the person who knows this best quit tomorrow?" Also look for processes that happen weekly or more often, cause confusion or errors, or involve handoffs between teams. Don't try to document everything at once - that leads to burnout. Document high-frequency, high-impact processes first, then expand from there.

What's the difference between documenting how a process should work versus how it actually works?

This is one of the most critical mistakes in process documentation. Don't document your idealized version from your office - shadow the person who does it best and document the reality. Record screen shares, ask them to narrate what they're doing and why, and observe the actual workflow. You'll be surprised how different reality is from what you imagined. Once you've documented what actually happens, then you can analyze and improve it. But starting with fantasy processes that nobody follows creates documentation that gets ignored immediately.

How do you get employees to actually follow documented processes?

The secret is involving people in creating the processes, not forcing processes on them. People don't trust processes they weren't part of building. Shadow the people who do the work best, get their input on documentation, and test procedures with real humans before publishing. Also avoid making processes too rigid - define required outcomes and critical steps, but let people use judgment for the rest. Finally, announce new processes with training walkthroughs, not just a silent document drop. When people understand why a process exists and had input in creating it, they're far more likely to follow it.

How often should internal process documentation be updated?

Review process documentation quarterly at minimum, and update immediately whenever a process changes. Assign a specific owner to each process who's responsible for keeping it current - without ownership, documentation rots. Outdated documentation is often worse than no documentation because people follow old instructions and wonder why things break. Common red flags include documentation referencing software your company stopped using, approval chains that no longer exist, or steps that take longer than they should because the process has evolved but the documentation hasn't.

What are the biggest mistakes companies make with internal processes?

Five common mistakes: (1) Making processes too rigid with inflexible rules that people ignore because they get in the way of work, (2) Documenting in a vacuum without involving the people who actually do the work, (3) Never updating documentation so it becomes dangerously outdated, (4) Publishing documentation without training people on it or even announcing it exists, and (5) Perfection paralysis where people spend weeks creating the perfect document while employees remain confused about the actual task. A decent process document that exists and gets used beats a perfect one that's still in draft.