How much does workflow management affect your bottom line?

Posted on December 4, 2015 in Blog ,Increase Project Profitability by

workflow managementMost businesses have standalone software packages that act as repositories for data and to perform various job specific tasks. It’s common to end up with 3 or more separate systems, each essentially acting as a silo for information, making it difficult to correlate and reconcile your business data.

Maintaining hard copies, physical filing cabinets, spreadsheets and/or reports can be used to effectively centralize, aggregate and gain access to data from various sources, up to a certain extent. But, as the volume of information and complexities of the business i.e. workflow increases, so does the time to keep these hard copies, physical filing cabinets, spreadsheets and/or reports organized. In addition, the level of data accuracy tends to significantly decrease.

Keep reading for a simple example of how one of our customer’s Accounts Payable department simplified their workflow management and decreased their invoice processing time by 79.41%.

Prior to implementing ERP Software

To process one vendor invoice:

Time = 3.4 hours at $20/hr

Cost = $68.00

Workflow:

  1. Front office opens and sorts mail
  2. Vendor invoice date stamped
  3. Front office person delivers invoice to AP inbox
  4. AP clerk reviews invoice
  5. AP clerk retrieves matching PO from filing cabinet and reviews
  6. AP clerk delivers invoice and matching PO to controller
  7. Controller reviews invoice and PO
  8. Controller stamps authorization on invoice
  9. Controller delivers authorized invoice and PO to AP clerk
  10. AP clerk processes invoice for payment
  11. AP clerk files invoice and PO in filing cabinet
  12. Check cut
  13. Check placed in envelope
  14. Check mailed

After implementing Q360™ ERP Software

To process one vendor invoice:

Time = 0.7 hours at $20/hr

Cost = $14.00

Workflow*:

  1. AP clerk opens up electronic invoice from vendor’s email
  2. AP clerk drags copy of electronic invoice to the existing PO in Q360
  3. AP clerk views details of invoice and PO
  4. AP clerk clicks submit and payable is automatically posted
  5. Controller reviews posted payable
  6. Controller authorizes payable
  7. Check cut
  8. Check placed in envelope
  9. Check mailed

The results**

Time Savings = 1,620 hours/year

Cost Savings = $32,400/year for one simple job role.

Adopting a holistic approach to the problem enables companies to dovetail workflow management throughout the business. It’s important to ask yourself: What type of system will allow work to quickly flow through departments while implementing controls and providing visibility to those manning the levers and pulleys and those guiding the ship.

As demonstrated in the above example, the answer is found in formal ERP or Enterprise Resource Planning tools, big software programs that have many intricate parts that account for every aspect of your business. However, selecting an industry knowledgeable partner is just as, if not more important than selecting the right software.

Finding a match on both fronts, although rare, is as close to a silver bullet as you’ll find. Finding purpose-built software for your business negates the risk of having to bend your business to the software’s innate workflow. And finding a purpose-built professional services team that has a deep understanding of how you run your business now and how you want to improve your workflow management is the secret sauce to enabling the software to be implemented in alignment with your strategic goals instead of the other way around. The value a partner brings doesn’t stop after a successful system implementation.  The right partner works with you continuously to ensure your ongoing success.

Contact us to see how you can start improving your workflow management.

 

* To ensure compliance the customer instructed all vendors to submit electronic invoices (emails with attachments were fine) or they would deduct a $50 processing fee from the vendor’s invoice.

** Based on processing an average of 50 invoices/month.


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