Breakthrough Process Improvement case study submitted by The Kanoo Gorup during 3rd Continual Improvement & Innovation Symposium organized by Dubai Quality Group's Continual Improvement Subgroup to celebrate World Quality Day 2011.

1. SERVICES DIVISION
Breakthrough Process Improvement Case Study
“IMPROVING EMPLOYEE CLAIM
REIMBURSEMENT PROCESS”
The Kanoo Group Central Accounts Team
(Ashraf Ahmed, Ms Mariam Al Busaidi,
Mr. S.A. Kapadia)
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2. Introduction
• The Kanoo Group Services Division processes
employees claims for reimbursement:
– Immigration expenses for family visa processing
– Consulate payment for passport renewals
– Visa medical test related expenses
– Salik payments for company cars
– Telephone expenses
– Miscellaneous cash payments
• 1,800 person are covered under above services
in Dubai and all Northern Emirates.
• Two full time equivalent (FTEs) employees were
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dedicated for the reimbursement process.
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3. Business Case
• The reimbursement process was having the
following chronic problems:
– Complaints of delays in receiving reimbursement from
employees
– Loss / misplacement of cash vouchers and supporting
documents requiring re-verification by Accounts (rework)
– Revelation of confidential information of employees (e.g. salary,
age etc.) due to manual handling of claim documents by
multiple persons.
– Numerous follow up calls from employees to Accounts.
– Very difficult to check duplicate claims, hence insistence on
submitting original bills, which was not possible in all cases.
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4. Stakeholders
• Internal customer departments
– Administration
– Public Relations
– Accounts
– Mail Room
– Cashier
– Kanoo JVs
• Kanoo employees
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• Internal Audit Department
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5. Voice of Customer
• Employees want reimbursement of their
expense claims
– In the shortest possible time,
– With transparency
– With accuracy
• Internal Audit wants adherence to
company policies
• Admin and HR want to reduce paperwork
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and manual efforts
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6. Project Charter
• The Problem Statement:
• Reduce paper consumption for claims
– 300 claim forms per month each with average 5 sheets by 60%
– 600 envelopes per month by 50%
• Reduce labour from 300 man-hours per month by 80%
• Reduce time wasted in searching for claim status from 25 man-hours
to less than 2 hours
• Reduce loss/misplacements of invoices and resulting rework to zero.
• Reduce additional accounting transactions required due to transfer of
employees during the course of the claim process.
• Reduce invoicing cycle time from 30 days to 10 day.
• Reduction in internal customer complaints from 30 to near zero.
• Reduce accounting man-hours involved from two FTEs by 50%.
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7. Project Team
• The teams involved:
– Service Accountant
– Administration Manager
– IT Department
– Software developer (Kanoo JV).
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8. Project Timeframe
– Start Date January, 2010
– Target completion by February, 2010.
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9. Process Flow (Before)
Company policies Delays in transit (documents, Gives to Deptt
Start for eligibility for voucher, with supporting people
Voucher cash) for the Secretary
claiming expenses documents is checked by
working outside the Main
Admin Staff
Office Deptt. Messenger
Employee incurs expense Goes to Cashier
Approval by Admin
Loss of Manager Cashier checks,
Claimant sends supporting confidentiality pays cash and
Paper
documents to Payroll enters data in the
consumption (600 (when
Accountant, as and when Admin staff will submit to Financial System
sheets + 300
the claimant wishes multiple
Payroll Accountant Cash /
envelops per persons with
voucher lost Messenger /
month) same name)
in transit
claimant signs the
Verify documents Payroll Accountant CPV
submitted Large number of status distributes the approved
vouchers to the concerned lying in
Voucher
query and follow up Messenger hands
Claimants deptt when
calls from claimants claimant on over cash to Deptt
Not OK vacation Secy
All OK? Account Codes
Claimant signs the voucher
Directory
OK in “Received by” column Deptt Secy arranges
to send cash to the
Payroll Accountant Claimant
prepares a Cash Payment Claimant in 9
Voucher (CPV) giving Kanoo Main
account code Office? No
End 9
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10. Proposed Solution
• Admin and Accounts managers jointly reviewed the
process and decided to simplify it.
• Decided to computerise the Claim Process.
• Requirements were given to IT Deptt. to develop a new
module in the Payroll System for Expense
Reimbursement.
• IT Department involved Gemini (Kanoo JV).
• Gemini developed the module covering the following
types of reimbursements:
– Emirates ID,
– Visa medical
– Immigration
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– Miscellaneous
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11. Modified Process
Start
Employee incurs expense Payroll system
automatically generates
entries for the financial
Claimant scans the system
expense bills and emails to
Payroll Accountant before
20th of each month Salary + reimbursement
Reimbursed expenses are amount is credited to
listed in the Salary Slip employees’ Bank
Claimant scans the
Accounts
expense bills and emails to
Payroll Accountant
Salary slip is uploaded on
Payroll Accountant checks Kanoo Intranet Note:
the bill, if OK adds to the
appropriate expense head For urgent payments,
in payroll system for the
employee
weekly processing of WPS
Employee downloads
Salary Slip
can be made.
Report on expense
reimbursement is
generated and presented
to Admin Manager for
approval
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13. Test Run
• Test Run was made in February, 2010
• Salary Slip format was modified to list the
expense reimbursement items.
• More expense categories were added.
• Each expense category was linked to the
Financial System through its account code.
• Automatic posting of reimbursed expenses to
the Financial System was achieved.
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14. Communication of Change
• Staff were informed of the new system
through a circular
• Manual Expense Claim Vouchers were
discontinued from April 2010.
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15. Benefits
1. Confidentiality of the employees’ data is protected as only the
employee and the Payroll Accountant can see the documents.
2. Reduced the flow of paper within and between departments.
3. Standardised cycle for submission of expense claims (once in a
month by the 20th)
4. Reduced follow up calls to near zero.
5. Reduced incidents of misplacing vouchers and resultant rework
and re-verification.
6. Reduced Accounting manpower requirement from two FTEs to
0.25 FTE.
7. Reduced the workload of the Admin Manager, Cashier, mail
room, departmental secretary and messengers.
8. There was positive feedback from the employees on the new
process.
9. Reduced handling of cash therefore reduced risk and reduced
insurance expense.
10. Checking for duplicate claims has become very easy.
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16. Horizontal Deployment
• The same system can be implemented in:
– Kanoo Group Abu Dhabi
– YBA Kanoo Group, Oman
– YBA Kanoo Group, Bahrain
– YBA Kanoo Group, KSA
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17. Further Improvements
• The system will be made web-based so that
employees can query claim status on-line from
anywhere in the world.
• Weekly processing of claims through WPS for urgent
reimbursements.
• Including expense claim module in the employee self
service module of the new Payroll system.
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18. Single Point Lesson
• Instead of approving papers one-by-one, data can be
entered in the computer and one single approval can
be taken for a batch.
• Rather than entering data in the computer at the end
of a process, it is better to enter it in the beginning.
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19. Recognition
• Appreciation received from external and internal
customers.
• Appreciation of project team by Group Management.
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