Innovations

AP Improves Invoice Logging and Processing in “Rapid” Fashion!

by Pramilla Chand

As a leader in Accounts Payable I felt that I had to come up with reasons why we didn’t meet the dashboard measures every month. Our data looked like a roller coaster – it fluctuated so much that it was difficult to determine the problem. We tried some quick fixes by placing patches on a broken system. That worked for a while, but then we needed new patches on top of the old patches. Correcting errors was consuming a lot of the staff’s time.

When fighting chronic fires likes these, it is important to look at the big picture instead of each incident, and to involve staff in decision making. In October 2005, we started a Rapid Process Improvement (RPI) effort to look at invoice logging and processing in Accounts Payable. The team was sponsored by Karen Long, the Director of Financial Services. Process owners were Donna Andreason and Keli Johnson and members were Alvin Chau (team leader) Cora Buenafe, Agnes Acholonu, Lolita Adarlo, Amelia Bermudez, Rien Phan, Rosemarie Valencia, and Jenna Witt. The team members named it the Invoice Processing Team (IPT).

The first day the team talked about its purpose and set up boundaries and objectives. The objective of the team was to meet the invoice logging standard, to log all invoices received in Accounts Payable within 48 hours and maintain the current invoice cycle time. The team brainstormed the problems and narrowed them down to three types: Type 1, the team can analyze and implement; Type 2 requires EIT member and manager’s approval because funding is needed; Type 3 requires EIT member’s approval because there is effect on customers and vendors.

The team’s goal was to tackle the Type 1 problems first. The team also identified some of their processes that they did not have any control over, for example the incoming mail from the post office. The post office delivers mail after 2 PM and there is not enough time to sort, open and log all invoices within 48 hours. The team quickly realized that if everyone did logging and processing that they would be able to meet the logging and the processing standard. The next two to three days the IPT spent a lot of time on cross training each staff member on different tasks.

During the RPI, the team brought up their concerns. For example, what was the priority – logging or processing, would there be lay offs in the future, and what was the best way to balance workload with other assigned tasks? Each of these concerns was reviewed, discussed, and resolved each day. This created a very positive climate within the team where team members openly discussed their concerns regarding the new change. The team charted the old and the new process and understands the challenges and opportunities they will have with the new process.

The team implemented the new process on October 15th and for the last three months the team has met the invoice logging and processing goal. The team has now begun to focus on their next milestone: involving process partners in resolving problem invoices efficiently.