Quicker, Better, Cheaper

Lean works in Finance (despite what you might have experienced)

Lean works in Finance (despite what you might have experienced)

If your operations use Lean for process improvement, then Finance are bound to be approached to implement Lean, if you haven’t been already. The experience of Finance teams who have had people come out of operations to work with them has generally not been positive.

Why, and what can you do to make Lean work in your Finance area?  Read more here

Making month-end and management reporting better

Making month-end reporting and management reporting better

Month-end and management reporting tends to be time-consuming and problematic.  In this article published by the Institute of Chartered Accountants in England and Wales, Finance & Management Faculty magazine Kevin Dilton-Hill looks at reporting trends, and explains how determining the right information, and “lean” methods of producing it, could bring benefits.

Click to retrieve pdf lean-month-end-reporting

Press here to learn more about AFRM(R) software that replaces spreadsheets to control the close better.

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Lean Credit Control

Lean Credit Control

Is it possible to change the credit control process so that it becomes professional, effective, and consumes fewer resources?

This is the challenge that JSK Solutions was posed by the finance director of a large professional services business.  The resource saving challenge was 20% to30%.  We found that a totally different way of working was required to save this level of resources.  Read more here

Replacing spreadsheets that control the month end process with purpose-built software to enable continuous improvement

A recent survey in Finance & Management (July/August 2012, page 5) states that “although ‘substantial’ investments [had been made in] their financial reporting systems and reporting processes, spreadsheets and email remain the dominant tools for managing reporting”.  The diagram below shows how the investment in the close process has significantly lagged the investment in other areas.  So it is not surprising that the close consumes large resources and is the source of unwelcome surprises; “reducing productivity… and missed internal deadlines… damaging finance’s reputation with board colleagues and creating knock-on effects for finance juniors”.

Comparison of investment in finance software

This lack of investment has been identified by software companies, for example, SAP and Oracle have modules that address this area.  AFRM (Accelerated Financial Reporting Management) from Hyland Software’s OnBase content management solution was created specifically to manage and improve (using Lean methods) the month-end close process; it can also be used for general task management outside the close, for example in budgeting or in merger and acquisition support.  AFRM is ‘cloud-based’ software so it has several practical advantages

  • It can be implemented at the pace that suits each finance function’s resource constraints
  • There is no need for big IT involvement as the system is accessed via internet browsers
  • There is no up-front capital cost as its licences are per seat per annum.

AFRM is a benchmark for what close management software should be able to do.  Its key features are

  • Each task is allocated to a person and by virtue of performing that task the software knows the progress of that task.  A task can be flagged as being at risk of delayed completion
  • At any stage management can see the status of a task individually or aggregated by person, day in the close or task group.  All tasks that are overdue or at risk can be easily identified for appropriate action
  • Tasks can be updated; the content, the doer and the reviewers can be changed temporarily or permanently.
  • The task steps are well documented for governance purposes; the process, sign-offs and supporting documentation
  • The task templates and supporting documentation are all accessed from the task and are always the latest version
  • Tasks can be tagged for allowable time and Lean waste analysis attributes Value Add, Non Value Add and Necessary Non Value Add to provide input to continuous improvement initiatives
  • Compliance or SOX test working papers can be generated from task tags
  • ‘Client produced’ audit working papers can be generated from task information.

Hyland Software are perhaps their own best case study for the AFRM software.  A couple of years back they were acquired by a software group that planned further acquisitions in to Hyland and were going to go public.  At that stage Hyland took 15 days for the close and were hardly SOX compliant.  They also did not want to risk a big Lean re-engineering project with all that going on and in the face of a hiring freeze.  Similar to many firms they had a process that worked mainly because of what was in peoples’ heads and because of their efforts rather than for the quality of the process documentation or management information about the close.  They also had binders full of trees that documented all the work in the close.  But, their biggest problem was that they did not really know what was going on when and how long things took.

Faced with this situation the author has often been forced into time sheeting the close period.  But because they were not doing a once off Lean review but rather continuous improvement and being a software company they decided to record what was actually happening in the close in their own software.  Over a period of time they developed what they needed to better manage and improve the close and AFRM was born.  They reduced the close period by period, through the disruption of mergers and acquisitions that trebled the size of the company and with a hiring freeze, and it now takes 5 days.  They have ‘saved forests’ because all their documentation is on-line.  They developed the SOX module to meet those requirements and found that the AFRM database had all the information that the auditors required so they built that module to meet those requests.  The experience with other implementations is that the mere fact of installing the AFRM results in a 15% saving in resources; the Lean improvement work then starts saving time and more resources.