An Accounts Payable/Receivable Department continued to exhibit long lead times with loss of discounts as well as late fees being assessed to the organization. New accounting software was purchased and implemented. However, resource inefficiencies still exist within the department even though software has been fully implemented because employees were using same processes as before software was implemented. There existed no “check and balance” to ensure consistent usage (or process).
We used Value Stream Mapping (VSM) to map the Current State of the Accounts Payable process. We then created a Future State of the same process. We analyzed the gap between the Current and Future States and created an Action Plan. Short and Long Terms goals were established to achieve the Future State.
The immediate goals realized:
• Full and Consistent utilization of accounting software
• Using software to generate reports
• Reallocated 1.5 people to improve efficiency
• Reduced cycle time from 15 days to 5 days (70%)
• Established procedure for sending files to permanent storage