Accounts Payable Processing
        Improvements
         Kimberley Garrison
      Director, Accounting Systems


      PE...
Introduction

Who, Where, and What we do:
  PETCO is a privately held national company, founded in
  1965 and headquartere...
PETCO’s Accounts Payable Journey
AP Invoice Processing              AP Business Process
and Approval automation           ...
AP Invoice Processing and Approval Automation
                  Objectives

  Drive control through consistent dollar appr...
AP Business Process Improvement Objectives

 Check Disbursements:
   Reduce the number of check runs and time required to ...
Priorities

Maintain consistent service level for vendors and internal
business partners during change
Utilize the PETCO P...
AP Invoice Processing and Approval Automation
        Baseline Achievement/Measures
Before                After           ...
AP Business Process Improvement Baseline
            Achievements/Measures
Before                     After               ...
Lessons Learned

Involve an objective party (i.e. Business Systems Analysts) to help
drive project and change process
    ...
Next Steps
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Kimberly Garrison, Petco - Accounts Payable Processing Improvements

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Presentation from the 14th Annual North American Shared Services & Outsourcing Week, 2010

To find out more about the 2011 event go to:
www.sharedservicesweek.com

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Kimberly Garrison, Petco - Accounts Payable Processing Improvements

  1. 1. Accounts Payable Processing Improvements Kimberley Garrison Director, Accounting Systems PETCO Animal Supplies, Inc March 24 , 2010
  2. 2. Introduction Who, Where, and What we do: PETCO is a privately held national company, founded in 1965 and headquartered in San Diego, CA First retail store opened in 1980 Currently 22,000+ employees in 50 states As of February 2010 PETCO has 1,000+ retail stores throughout the 50 states and PETCO.COM online Pet Products PETCO offers a full range of pet products and services, including: • Grooming • Vet Services • Dog Training • Pet Photography
  3. 3. PETCO’s Accounts Payable Journey AP Invoice Processing AP Business Process and Approval automation Improvement Measure the current volume of Document the current process vendor invoices Identify areas for improvement Analyze the processes to Obtain buy in for change then understand where and what implement waste exists Reduce company risk, Design and implement new resources, and time to system with consistent invoice complete processing and approval Timeline: Timeline: June 2009 – December 2009 July 2008 – March 2009
  4. 4. AP Invoice Processing and Approval Automation Objectives Drive control through consistent dollar approval levels for expenses Reduce non value added time to process vendor invoices Manual tracking of vendor invoices through the approval chain Follow-up on late/missing invoice approvals Provide enterprise wide Business Process Management system that is flexible and scalable to be utilized for future and cross functional processes
  5. 5. AP Business Process Improvement Objectives Check Disbursements: Reduce the number of check runs and time required to process check runs Reduce the number of manual approvals and number of associates reviewing check runs Travel and Expense Processing: Place the auditing function in the hands of those accountable (employee supervisors) Allow AP to focus on improving service levels Reduce time required for processing requests for the customers Vendor Purchase order/Receipt/Invoice Match Reduce the time required to process disputes Eliminate manual calculations and risk of error
  6. 6. Priorities Maintain consistent service level for vendors and internal business partners during change Utilize the PETCO Project Management Framework to manage project oversight and governance Keep business partners engaged in the change process Deliver economical and sustainable business process improvements to Accounts Payable and customers
  7. 7. AP Invoice Processing and Approval Automation Baseline Achievement/Measures Before After Cost Savings Benefits Invoice Processing • Invoice approval •2,400 hrs/mo •1,390 hrs/mo Reduction of 42% levels applied consistently Scanning throughout the •347 hrs/mo •173 hrs/mo Reduction of 50% organization • Systemic invoice approval escalation and tracking via established routing rules (audit trail) • Systemic and timely release of payments Project Cost: $426k Payback: 1.79 yrs 3-year IRR: 32.3%
  8. 8. AP Business Process Improvement Baseline Achievements/Measures Before After Cost Savings Benefits Check Disbursements • Fewer manual •1,200 hrs/mo •690 hrs/mo Reduction of 43% approvals required •96 check runs/mo •64 check runs/mo Travel & Expense • Allows AP personnel •520 hrs/mo •43 hrs/mo Reduction of 91% to focus on AP •Removed audit functions function from AP Vendor purchase • Clear process for order/receipt/invoice dispute resolution match •1,900 hrs/mo Reduction of 62% staff •5,000 hrs/mo •No manual •Associates manipulation of • Elimination of manual researching in multiple financial information calculations and sources adjustments •Multiple manual adjustments of financial information
  9. 9. Lessons Learned Involve an objective party (i.e. Business Systems Analysts) to help drive project and change process Incorporate tools and time for communication between teams Breaking the mold should be a focus of the analysis This helps drive answers to why we do something, do we need to do it, and should we continue to do it Process improvement is a continuous cycle involving the People, Process, and Technology in a Company A key to success is ownership of the business process Put controls in place, to prevent repeating the mistakes of the past Plan for additional resources when implementing an enterprise wide tool Develop metrics for continuous monitoring
  10. 10. Next Steps
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