Recently, we worked with a mid-market organization facing a number of challenges. They are growing, have a large number of manual processes and they are evaluating the possibility of initial public offering (IPO).
The month-end closing process took 20 days to prepare financials, which was frustrating to all involved and not acceptable to meet their IPO goal. We focused on the accounting, treasury and processing areas and mapped out the current state processes. We brought together a team of those involved in the processes from beginning to end – regardless of their reporting structure- to better understand how data was moving through the organization, how technology was being used, bottle necks, gaps, risks and ultimately, inefficiencies.
It can sometimes be challenging to bring together multi-functional teams and pull them away from their daily tasks, but done well, it typically accomplishes a number of things:
- Information sharing – Every time we do this, someone in the room says, “I didn’t know you did that.” It may be a value added activity, or not, or simply a tip/trick that is helpful to another person or group. Regardless of the size of the organization, there is a value to bringing together those who functionally do the activities.
- Problem solving – Empowers the employees to solve the problem and all the players are at the table to do so. The end users and the technologist can collaborate to develop a viable solution.
- Buy-in – Because the employees are the ones solving the problem, they “believe,” in the solution and are more likely to embrace the necessary changes than when a new process is thrust upon them.
- Focus – It shows your employees this is important to the company, it isn’t just something that is “my,” problem and I just have to deal with it, but something we, as a company, want to resolve.
For this organization we were able to identify a few primary issues:
- Lack of integration between the general ledger and subsidiary applications which required substantial rekeying, reconciling, etc. and presented the opportunity for error
- Legacy tasks that were created prior to their growth and housed in accounting, but should have been reassigned to other areas
- Many manual processes that could be automated
- Outdated policies/procedures that weren’t reflective of the current business needs
By developing a roadmap to prioritize the to do’s, assigning ownership and accountability, we created an actionable plan. The quick wins reduced the monthly close cycle by more than 30% and the second phase will achieve greater. To learn more about how RSM can assist you with your other business needs, contact RSM’s management consulting professionals at 800.274.3978 or email us.