There are no accounting transactions that actually add value for your customers. No customer would be willing to pay for purchase order matching, or works order processing, or inventory tracking through your business. These transactions have arisen over 75 years as “standard” methods of financial control. Auditors live trawling through transactions (it’s easy money) and years of training have programmed us not to question them.
The fact is that these financial transaction are costing your business a great deal of money and, yet, deliver no value. In one business we studied with 150 employees, the equivalent of 18 people were fully occupied processing such transactions – posting works orders, time sheets, goods received notes, matching purchase orders and so on. That was costing the company over 12% of their total revenue.
We’re not saying that these transactions can be totally eliminated – financial control must be maintained – but we are saying that financial processes can be greatly streamlined to radically reduce the amount of time required to achieve the same level of financial control:
- Month end close reduced from five days to 1½ days
- Purchase order transactions reduced by 60%
- Works orders entirely eliminated
- Labour tracking reduced to a “top line” level
- Inventory tracking reduced to goods received and finished goods despatched
- KPIs reduced from 50 to 8
These results have been achieved by our clients with no loss of financial control, but a great reduction in transaction costs. Lean accounting is the way forward to radically reduce costs, releasing the time of accountants for decision support – which does add value to the business.
We will help you study and improve your financial processes and we will give you the skills to keep improving after we have gone. We guarantee that the project costs of working with us will repay themselves within 12 months – and our close-out report will demonstrate how.