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Accounts Payable Rework Reduction Project

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  • #24781

    juadams
    Participant

    I am working on a project in Accounts Payable where the goal is for them to touch every invoice once – basically an invoice arrives, they process it and then pay it. 
    I have pareto’ed the reasons for rework and top reason is the purchasers are not closing out the Purchase Orders when the work is complete or the service has been delivered.  So the invoice arrives at AP and they go into the system and the PO has not been received.  AP can’t pay it because they don’t know whether the work has been done or not.  In most cases the work has been done and the purchaser just forgot to go into the system and close out the order. 
    Any ideas on how to get past this one?  It is a human error thing and I don’t know what type of solution to put into place to make people not forget! 

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    #59406

    Adam Bowden
    Participant

    Go to the head of purchasing – provide a list of people not closing
    out the PO’s – get the head of Purchasing to “re-align” expectations
    with a big stick.Adam

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    #59408

    juadams
    Participant

    Hahah – that is our current process if you could believe it!  It works for about 2 weeks and then people slide back to their old ways – hence the need for the project!

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    #59409

    Adam Bowden
    Participant

    AP groups love a 6 foot by 4 foot white board with some nice
    metrics on their performance – with the offending names on a very
    large pareto. In Denver there is a road called Colfax road where
    the “ladies of the night” hang out – the police started posting
    pictures of people using their service in the local paper – it made
    an impact for sure and posting the right metrics in the AP area will
    also drive the right long term behavior provided the
    Leader/Manager has the ability to keep on top of it.Adam :^)

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    #59418

    Shaun Wainwright
    Member

    I agree, the white boards or large displays works a treat, however, it doesn’t keep the mind focused all the time.  My last company had individual performance contracts (IPC) that were used to track the performance of staff.  These IPC’s were used for a number of things, such as evidence of development and promotion potential, but more importantly, their bonus.  We linked the measurements from the project in the area and the human error rates to the IPC’s and… No-one lost sight or slipped back into their old ways….  In fact it created a culture of what can we do differently to maintain quality by increaseing performance (and in turn bonus!)…
     

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    #59419

    Adam Bowden
    Participant

    I agree — I have seen the same also.Adam

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    #59420

    Chris Wheeldon
    Participant

    It sounds like your overall process needs some re-work. Purchasers should not be able to “forget” to go into the system – it should either be simple and routine enough that it occurs as part of their regular activities, or you need to have it triggered by another dept, such as AP asking the requisitioner to verify that the work is completed. The problem with relying on the requisitioners to close out the order is that they aren’t interested in having the order closed – they just wanted the work done (which they’ve got, right?). You can beat on them all you like but they’re listening to station WIIFM, not you and not AP. So – what is in it for them, anyway?

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