Project outline for streamlining back-office invoice discounting and asset based finance sales ledger reconciliations. Based on Six Sigma principles ... but written for an ordinary business taking first steps.

1. Hassle-free
reconciliations
A presentation for invoice discounting friends
Monday, February 9, 2009

2. THE BASICS ... never out of fashion
Client posts:
Invoices
Monday, February 9, 2009

3. THE BASICS ... never out of fashion
Invoices
Client posts:
Credit notes
Monday, February 9, 2009

4. THE BASICS ... never out of fashion
Credit notes
Invoices
Client posts:
Cash
Monday, February 9, 2009

5. THE BASICS ... never out of fashion
Cash
Credit notes
Invoices
Client posts:
Journal adjustments
Monday, February 9, 2009

6. THE BASICS ... never out of fashion
Adjustments
Cash
Credit notes
Invoices
Client posts:
oops ... Errors
Monday, February 9, 2009

7. THE BASICS ... never out of fashion
Errors
Adjustments
Cash
Credit notes
Invoices
This is the sales ledger,
posted by the client.
Monday, February 9, 2009

8. THE BASICS ... never out of fashion
DISCOUNTER AVAILABILITY BASE
Errors
Adjustments Errors
Cash Cash
Credit notes Credit notes
Invoices Invoices
CLIENT SALES LEDGER
Monday, February 9, 2009

9. THE BASICS ... never out of fashion
DISCOUNTER AVAILABILITY BASE
Errors
Adjustments Errors
Cash Cash
Credit notes Credit notes
Invoices Invoices
CLIENT SALES LEDGER
This is the
Discounter’s
Availability base. It
is updated through
notification.
Monday, February 9, 2009

10. THE BASICS ... never out of fashion
DISCOUNTER AVAILABILITY BASE
Errors
Adjustments Errors
Cash Cash
Credit notes Credit notes
Invoices Invoices
CLIENT SALES LEDGER
Errors &
Adjustments ?
What about
Monday, February 9, 2009

11. THE BASICS ... never out of fashion
Reconciliation
identifies errors and adjustments
Monday, February 9, 2009

12. THE BASICS ... never out of fashion
CLIENT-SIDE RECONCILIATION DISCOUNTER -SIDE RECONCILIATION
Reconciled B/F sales ledger balance Reconciled B/F Availability base balance
Add: invoices Add: matched invoice batches
Less: credit notes Less: matched credit note batches
Less: cash Less: matched cash
+/- : adjustments
C/F period end balance C/F period end Availability base balance
Monday, February 9, 2009

13. THE BASICS ... never out of fashion
CLIENT-SIDE RECONCILIATION DISCOUNTER -SIDE RECONCILIATION
Reconciled B/F sales ledger balance Reconciled B/F Availability base balance
Add: invoices Add: matched invoice batches
Less: credit notes Less: matched credit note batches
Less: cash Less: matched cash
+/- : verified client adjustments
+/- : adjustments
+/- : discounter-side adjustments
C/F period end balance C/F period end Availability base balance
NB: Adjustments need to be put through in order to complete the reconciliation process.
Monday, February 9, 2009

14. How to get to: Hassle-free
Make it
predictable
Monday, February 9, 2009

15. How to get to: Hassle-free
Step 1:
Receive information from client
Monday, February 9, 2009

16. How to get to: Hassle-free
information
Step 2:
Process information
Monday, February 9, 2009

17. How to get to: Hassle-free
information process rec.
Step 3:
Output rec. result
Monday, February 9, 2009

18. How to get to: Hassle-free
information process rec. output result
A three step process.
Monday, February 9, 2009

19. How to get to: Hassle-free
What can go
wrong?
Monday, February 9, 2009

20. How to get to: Hassle-free
WHAT CAN GO WRONG?
information process rec. output result
Late or non-submission
Monday, February 9, 2009

21. How to get to: Hassle-free
WHAT CAN GO WRONG?
information process rec. output result
Late or non-submission
Incomplete information
Monday, February 9, 2009

22. How to get to: Hassle-free
WHAT CAN GO WRONG?
information process rec. output result
Late or non-submission
Incomplete information
Incorrect information
Monday, February 9, 2009

23. How to get to: Hassle-free
WHAT CAN GO WRONG?
information process rec. output result
Fragmented, unsystematic steps
Monday, February 9, 2009

24. How to get to: Hassle-free
WHAT CAN GO WRONG?
information process rec. output result
Fragmented, unsystematic steps
Inadequate clerical mandates
Monday, February 9, 2009

25. How to get to: Hassle-free
WHAT CAN GO WRONG?
information process rec. output result
Fragmented, unsystematic steps
Inadequate clerical mandates
“Shout-loudest” method of assigning priority
Monday, February 9, 2009

26. How to get to: Hassle-free
WHAT CAN GO WRONG?
information process rec. output result
“Shout-loudest” method of assigning priority
Monday, February 9, 2009

27. How to get to: Hassle-free
WHAT CAN GO WRONG?
information process rec. output result
“Shout-loudest” method of assigning priority
Measuring system unfit for purpose
Monday, February 9, 2009

28. How to get to: Hassle-free
WHAT CAN GO WRONG?
information process rec. output result
“Shout-loudest” method of assigning priority
Measuring system unfit for purpose
Uncertainty for client as to when and how
availability will change
Monday, February 9, 2009

29. How to get to: Hassle-free
Want to be
Hassle-Free?
Monday, February 9, 2009

30. How to get to: Hassle-free
Take these
steps - tweak
them to make
them work for
you.
Monday, February 9, 2009

31. How to get to: Hassle-free
Try the Resource
Bank at
bixpeppard.com
for more ideas.
Monday, February 9, 2009

32. How to get to: Hassle-free submissions
information process rec. output result
Make this about
communication
and re-connection.
Monday, February 9, 2009

33. How to get to: Hassle-free submissions.
This month, for every facility, send one of three communications:
LETTER A LETTER B LETTER C
We have just
received your
reconciliation.
It was on-time,
complete and
accurate. That
really helps us to
keep your facility
running smoothly
and we want to
thank you.
Thank you!
Monday, February 9, 2009

34. How to get to: Hassle-free submissions.
This month, for every facility, send one of three communications:
LETTER A LETTER B LETTER C
Thank-you for this
month’s
reconciliation.
We were able to use
some of the
information, but
there were a few
problems with the
submission and I
wanted to let you
know about
them: ...................
Can we work together
to get this working
better?
Monday, February 9, 2009

35. How to get to: Hassle-free submissions.
This month, for every facility, send one of three communications:
LETTER A LETTER B LETTER C
I wanted to let you
know that there are
some serious
problems with the
reconciliation this
month.
We have to work on
them together as a
matter of urgency
because if we don’t
solve the problem, the
way your facility runs
may change.
Here are the
issues: ...
Can we agree a plan
to tackle them?
Monday, February 9, 2009

36. How to get to: Hassle-free submissions.
This month, for every facility, send one of three communications:
LETTER A LETTER B LETTER C
I wanted to let you
Thank-you for this
We have just know that there are
month’s
received your some serious
reconciliation.
reconciliation. problems with the
reconciliation this
We were able to use
It was on-time, month.
some of the
complete and information, but
accurate. That We have to work on
there were a few
really helps us to them together as a
problems with the
keep your facility matter of urgency
submission and I
running smoothly because if we don’t
wanted to let you
and we want to solve the problem, the
know about
thank you. way your facility runs
them: ...................
may change.
Thank you! Can we work together
Here are the
to get this working
issues: ...
better?
Can we agree a plan
to tackle them?
Monday, February 9, 2009

37. How to get to: Hassle-free submissions.
At the end of the month, count up:
LETTER A, B or C
A
B
C
18
180
200
Monday, February 9, 2009

38. How to get to: Hassle-free submissions.
At the end of the month, count up:
A, B or C FREQUENCY OF PROBLEMS
200
150
100
50
0
no cr. ledger
can’t identify exports
Monday, February 9, 2009

39. How to get to: Hassle-free submissions.
At the end of the month, count up:
A, B or C FREQUENCY OF PROBLEMS ANY LINK - PROBLEM TO “C”
60% of accounts
which submitted
paper ledgers
received letter C.
Monday, February 9, 2009

40. How to get to: Hassle-free submissions.
At the end of the month, count up:
A, B or C FREQUENCY OF PROBLEMS ANY LINK - PROBLEM TO “C”
200
A
B
150
C 60% of accounts
which submitted
18 paper ledgers
100
received letter C.
180
50
200
0
no cr. ledger
can’t identify exports
Use this information to work out what you most
want to change. Try a back-of-an-envelope
calculation to work out how much you might save.
Monday, February 9, 2009

41. How to get to: Hassle-free processing.
WHAT CAN GO WRONG?
information process rec. output result
This is where we get
everyone working
the same way.
Monday, February 9, 2009

42. How to get to: Hassle-free processing
Better for clients - more predictable
Better for risk - easier to pinpoint
acute problems
Better use of resources - £ per
reconciliation falls
Monday, February 9, 2009

43. How to get to: Hassle-free processing
Better for clients - more predictable
Better for risk - easier to pinpoint
acute problems
Better use of resources - £ per
reconciliation falls
Monday, February 9, 2009

44. How to get to: Hassle-free processing
Better for clients - more predictable
Better for risk - easier to pinpoint
acute problems
Better use of resources - £ per
reconciliation falls
Monday, February 9, 2009

45. How to get to: Hassle-free processing.
One person decides ...
DEFINE & DOCUMENT
“The
definitive
guide”
Monday, February 9, 2009

46. How to get to: Hassle-free processing.
One person decides ...
DEFINE & DOCUMENT MAKE IT SELF-CONTAINED
A single person
can perform the
process from end
to end. If there
are glitches,
there is a defined
escalation
process and a
clear hand-over.
Monday, February 9, 2009

47. How to get to: Hassle-free processing.
One person decides ...
DEFINE & DOCUMENT MAKE IT SELF-CONTAINED SET A PRIORITISATION SYSTEM
Weight for size of
account, risk
category, fees
earned, key
relationship etc.
to get a
prioritization
score.
Monday, February 9, 2009

48. How to get to: Hassle-free processing.
One person decides ...
DEFINE & DOCUMENT MAKE IT SELF-CONTAINED SET A PRIORITISATION SYSTEM
A single person
Weight for size of
can perform the
account, risk
process from end
“The category, fees
to end. If there
definitive earned, key
are glitches,
relationship etc.
there is a defined
guide” to get a
escalation
prioritization
process and a
score.
clear hand-over.
Run a competition to spark and capture ideas. But
this isn’t process design by consensus. In the end,
one person decides what the process will be.
Monday, February 9, 2009

49. How to get to: Hassle-free output
information process rec. output result
Comprehensive monitoring
and a service commitment
which says that availability
will be updated within 3
working days.
Monday, February 9, 2009

50. How to get to: Hassle-free output
ONLINE TRACKER - CLIENT FACING SIDE
RECONCILIATION TRACKER m/e 31 January, 2009 due by 15th February, 2009
DATE SUBMITTED: 12/02/2009
DATE ACCEPTED: 12/02/2009
STATUS: Not yet started. In progress. System availability updated.
If your availability has been updated, you can click here to see the full calculation.
Would this look good on your system?
Monday, February 9, 2009

51. How to get to: Hassle-free output
ONLINE TRACKER - PORTFOLIO SIDE
RECONCILIATION TRACKER m/e 31 January, 2009 due by 15th February, 2009
not yet received
not yet started
in progress
escalated
availability updated
Click to see:
by overall number
by risk category
by client manager
Choose a simple graphic for yourself - one click away
from the detailed data.
Monday, February 9, 2009

52. Hassle-free reconciliations
The wins
Client expectations about service - met
Cost per reconciliation - driven down
Better risk management - sharper focus
Time for ad hoc investigations - created
Monday, February 9, 2009

53. Hassle-free reconciliations
The wins
Client expectations about service - met
Cost per reconciliation - driven down
Better risk management - sharper focus
Time for ad hoc investigations - created
Monday, February 9, 2009

54. Hassle-free reconciliations
The wins
Client expectations about service - met
Cost per reconciliation - driven down
Better risk management - sharper focus
Time for ad hoc investigations - created
Monday, February 9, 2009

55. Hassle-free reconciliations
The wins
Client expectations about service - met
Cost per reconciliation - driven down
Better risk management - sharper focus
Time for ad hoc investigations - created
Monday, February 9, 2009

56. How to get to: Hassle-free
Thank-you for
watching!
Monday, February 9, 2009

57. How to get to: Hassle-free
Try the Resource
Bank at
bixpeppard.com
for more ideas.
End.
Monday, February 9, 2009