Digital Conversion in the Accounting Department

A $100MM subcontractor residential construction industry.

Steep growth coming out of the housing collapse of 2009 reached a critical point in 2014 when the percentage increases in revenue were well into the double digits and the base to which they were adding was becoming sizable. The required transaction processing capacity of the Accounting department surged past the previous high point by about 30% and the company’s paper-based workflows became unsustainable and required the addition of significant staff and overhead costs.

As is often the case, the first point of attack on an issue like this is to examine the process. There were visual clues all around the office as to the issue at hand. Banker boxes full of invoices stapled to checks were the first red flags. The team spent hours making and filing paper copies of virtually every transaction.

Here's what we’ve found over time when we find teams doing work that adds no value for customers or for the company. The team’s work is increased by:

Not real requirements, just misunderstood and perceived as real.
Requirements due to a flaw in the process somewhere else, usually in operations or management.
Requirements based on poor data structure or poor use of technology.

The first non-real requirement was for paper checks to be kept for auditors. Dropping this wasted activity freed up over one full FTE. There were also a number of instances where approvals were not taking place in sequence, placing pressure on the team to get them done before making crucial payments to vendors and subcontractors.

The team that was overloaded and strained to the breaking point was able to redirect two resources to the Billing department that was struggling to keep up with the increased activity levels as well as eliminate one full-time clerical position in under three months. Overall, an annual savings of over $200K, no more bankers’ boxes piling up in the hallways, and a stress level in Accounting, Billing, and Accounts Payable that dropped from a red-lined 10 to a sustainable 5.