case studies - Acctlytics

Improving Speed and Accuracy of Financial Reporting

CFadmin — Wed, 03 Nov 2021 11:13:06 +0000

Month-end closes were always a challenge at this $60M Technology Company. Each month end would bring new issues to the forefront exposing weaknesses in the accounting department. The staff was always behind, and the owner was not confident of the number being presented.

Customer Pain Points

There were a lot of effort hours being put into the process and hence the cost of month-end process was high and was consistently delayed.
Accountants would frequently sit late to finish the accounting and hence less time was spent on Reporting & Analysis.
There was a need to improve the quality of the financials and specifically to reduce the number of errors noticed each month.
Wide variance with the numbers that was forecast by the Controller to the leadership

Our Assessment

There was little standardization in processes.
Lots of Organizational Inertia and Reluctance to change.
4 different financial systems with multiple overlapping instances
Numerous last-minute journals and incomplete information
Lack of assisting automation, checklists, and scorecards Methodology Adopted
The first step was to send routine, repetitive work to Acctlytics office in Bangalore. We integrated work efforts in the US with accountants offshore in order to get a 24-hour work cycle and deliver other process improvements.
Next, all the components of the close process were mapped, and a MS Access database was used to automate the process.

The project also involved utilizing Lean Six Sigma principles to map current workflows, reviewing cut-off procedures, Risk based Accrual procedures, Identifying & Eliminating duplication of effort and redundant activities, Re-training personnel, and Benchmarking delivery time and quality.

Results

The company closed its books on the 5th day. The Controller had more time to analyze the results before presenting it to the Senior Leadership and Board. There was a significant reduction in the man hours put into the close process and over 100% reduction in the number of errors. Most importantly, the CFO had full visibility into the close process and could jump in when needed.

The post Improving Speed and Accuracy of Financial Reporting first appeared on Acctlytics.

Enabling Price Competitiveness Saves Small Business from Bankruptcy

CFadmin — Wed, 03 Nov 2021 11:08:50 +0000

This $4M document scanning company in Dublin, OH was fighting a losing battle competing with the likes of Xerox to win large and lucrative contracts with the City, County and State RFPs. Xerox had large data entry centers abroad and thus presented to prospective clients an irresistible advantage of a large company with lower prices.

Customer Pain Points

The process of prep-work, scanning and data indexing was very labor intensive, and the company’s breakeven price was high at an average of 11 cents a page. Competitors were quoting 7 – 8 cents per page.
Being labor intensive, there were lots of errors and the company could not afford further resources on the quality check process.
The turnaround time was long, and customers were not happy with the wait. The company tried a 24-hour work cycle, but the graveyard shift was plagued with absenteeism, low quality and high cost.
Getting trained labor was difficult, the costs were high, and there was lots of employee turnover.

Our Assessment

The company needed a low-cost source of data entry as that was the single largest cost component
Labor was not well managed and lacked a competitive benchmark to indicate what a good output (for e.g. keystrokes per hour) was. Methodology Adopted
The entire process flow was mapped from end to end.
Data Entry managers from the US went to our Bangalore office and trained 50 data entry staff.
A quality check process was inserted at each of the four stages in the process.
The work structure was re-arranged so that a continuous 24-hour cycle was maintained.

Results

The company saw a dramatic improvement in quality and significant cost reduction allowing Sales to put in competitive bids. The output from the remote data entry staff put pressure on local staff to do better. The company doubled its sales within 18 months of the new process.

The post Enabling Price Competitiveness Saves Small Business from Bankruptcy first appeared on Acctlytics.

Accounts Payable (A/P) Manager Keeps her Job

CFadmin — Wed, 03 Nov 2021 11:04:09 +0000

“In the battle between quantity and quality, quantity always wins”. This was a mantra that the A/P manager at a $18M retailer of industrial parts repeatedly pointed out. She was referring to the increasing workload that was forcing her team to data enter invoices without detailed verification. She was ready to quit as the company couldn’t afford additional resources.

Customer Pain Points

There was no verification of vendors invoices to company’s purchase orders. As a result, vendor bills, in numerous cases had higher than authorized prices.
Several occurrences of duplicate payments; some Canadian invoices paid in US dollars
Heavy backlog of invoices and thus, A/P Aging statement differed from actual vendor dues.
Complete breakdown of communications with Vendors resulting in frequent Hold situations.
No collection of 1099 information and so non-compliant with regulations.
Insufficient memos leading to inability to analyze accounts from a General Ledger standpoint.
Month-End accrual information not accurate.

Our Assessment

The team was overwhelmed with the volumes of transactions and there were no processes to enforce standardization or automation.
The two A/P clerks were very slow and so the A/P manager was pulled downwards to help them rather than manage them. She was therefore not able to bring in latest AP techniques like Electronic Billing and ACH Payment, A/P automation, and Document Imaging.
The team needed some strong leadership in enforcing their Vendors to follow best practices.

Methodology Adopted

1. One of the A/P clerks was offered an early retirement package and with that savings, we brought in two resources from Acctlytics.

2. All bills were scanned and emailed to the remote resources for data verification & entry.

3. The remote resources had access to the company’s cloud-based ERP system with adequate security protocols.

4. The A/P manager trained the two resources remotely over 2 – 3 weeks. A/P being very similar across the world, the two resources caught on very quickly.

Results

Within two weeks, all backlog was cleared; the offshore resources directly contacted all vendors, collected ACH information, 1099 information, enforced all invoices be emailed; cleared all invoices daily with full verification and approvals from the relevant department managers; set up payment arrangements and regular weekly communications. The A/P Manager was thrilled as she now only had to oversee the department, approve ACH and had time to prepare weekly cash outflow plans and other value-added reports for the Management.

The post Accounts Payable (A/P) Manager Keeps her Job first appeared on Acctlytics.

Getting Ahead in Your Travel Receipts & Travel Card Management

CFadmin — Wed, 03 Nov 2021 10:56:36 +0000

When the General Manager of the Engineering & Design division saw a $325 charge at the Tilted Kilt Restaurant on a Salesperson’s card, he blew a gasket. Credit card usage (or misuse!) and receipts gathering efforts were getting out of hand at this $18M Midwest firm.

Customer Pain Points

The company had heavy travel requirement and had company travel cards for each traveler.
There was a lot of administrative work in matching Card statements with Receipts; most travelers never submitted receipts and the company did not want to hire a costly resource just to administer the card expenses.
Due to delayed or missing reports and receipts, accounting was always faced with old expenses suddenly showing up.
There was no proper verification and control on what and where people could use their card and whether they were within travel expense limits.

Our Assessment

The company had sufficient policies and procedures, however, it lacked oversight and enforcement.
When accounting did raise concerns, the travelers invariably were able to talk to sales leadership and override accounting concerns and questions with some or the other explanation.
We recommended self-pay and claim, but the company did not want to pull the credit cards from sales and operations, in fear of demoralizing them.

Methodology Adopted

We hired a travel assistant for approximately $15,000 a year and created a dedicated travel email address – travel@companyname.com.
We then wrote up and circulated a document on how to submit receipts to this resource.
Every day the Travel Assistant would comb through the card statement online and where missing, email the card holders reminding them to send the receipts back with relevant info.
She would also advise that certain expenses were disallowed, instruct that such expense not be repeated and advise payroll for claw backs on repeated non-compliance.
The Travel Assistant then created a travel report for each trip, attached the receipts, got it approved by the employees’ manager and gave it to A/P for accounting.

Results

This arrangement was a win-win-win for all the three parties concerned – the travelers, as they now had an assistant helping with their administration headache, the operational managers who got to approve and review expenses in a timely manner, and the accounting team, as the validation and verification of expense reports was already done by the time it reached them. Over a period of time, travelers also started spending within limits and that savings more than easily recovered the assistant’s cost.

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