Best Practices

A set of guidelines, ethics or ideas that represent the most efficient or prudent course of action. Best practices are often set forth by an authority, such as a governing body or management, depending on the circumstances. While best practices generally dictate the recommended course of action, some situations require that such practices be followed.

Best practices serve as a general outline for a variety of situations. For instance, in the production process, a list of best practices may be given to employees, highlighting the most efficient way to complete their tasks. For accountants, the Generally Accepted Accounting Principles represent best practices for the profession. An investment manager may follow best practices when managing a client's money by prudently investing in a well-diversified portfolio.