The document discusses the application of process improvement methodologies to enhance finance and accounting practices, focusing on techniques such as business process re-engineering, Six Sigma, and Lean improvement. It highlights the need for conducting process reviews to identify inefficiencies and develop future state process maps, while emphasizing the importance of understanding the end-to-end processes and obtaining input from process owners. Additionally, the text addresses potential resistance to change and the necessity of effective communication and executive sponsorship in implementing improvements.

1. Utilize Process Improvement Methodologies
to Improve Finance and Accounting
Tom Sonde, CPA
Greater Philadelphia Conference
Widener University
Friday, May 18, 2012

2. Utilize Process Improvement Methodologies to
Improve Finance and Accounting
Agenda
Introduction
Conducting Process Reviews
What to Look For
Designing the Future State
Other Keys to Success

3. Process Improvement Methodologies
Business Process
Reegineering
Management (BPM)
Six Sigma Process Lean
Improvement
Total Quality Enterprise Process
Management (TQM) Management (EPM)

4. Improvements are can be Achieved Across your
Organization
Accounting Processes
Payroll Billing
General Ledger
Consolidations
Processes
Accounts Credit &
Payable Collections
Travel &
FP & A
Entertainment

5. Is this Occurring in your Organization?
Evidence Process Improvements are Needed
 Simple tasks take too long to complete
 Too much time is spend validating data
 Employees constantly complain
 Too much paper is being used
 Backlogs exist
 There is a significant amount of manual keying and
rekeying of data

6. Is this Occurring in your Organization?
Evidence Process Improvements are Needed
 Information is not easily accessible
 Senior management information requests result in
constant fire drills
 System workarounds and renegade processes exist
 Excessive use of spreadsheets
 External databases / data warehouses supplement the
accounting system
Does senior management even realize
how many inefficiencies exist?

7. Utilize Process Improvement Methodologies to
Improve Finance and Accounting
Agenda
Introduction
Conducting Process Reviews
What to Look For
Designing the Future State
Other Keys to Success

8. Obtain an Understanding of the Underlying Cause of
Process Issues by Conducting Process Reviews
Process Reviews
The key to resolving process issues is to:

9. Obtain an Understanding of the Underlying Cause of
Process Issues by Conducting Process Reviews
Process Reviews
The key to resolving process issues is to:
Address the end-to-end process.

10. Addressing the End-to-End Processes is the
Key to Success
AP and
Disbursement
transactions
Payroll - Salary and Benefits Expenses General Fund
Salary and Quarterly
Benefit Summary Report
Expense (2)
available for
Payroll System
transfer VAC
system Excel Spreadsheets
Risk Management - Life, Health, Dental Expenses are turned into a text RollOver Monthly
file then transferred Report sent to
Report of all Departments Changes are input into the VAC departments
enrollment is sent Spreadsheet VAC System is
return hard copies on Excel Disbursement System (5)
Health Enrollment to departments for is sent to updated
to Risk Spreadsheet
Database with all update/correction Controllers
Management for which calculates
employee health, office
changes chargebacks
life and dental data
Telecommunications - Phone MOD Budget
Expense Report used to
Telephone bills are Total for each Each department Department prepare MQ
received from Nynexl, receives an Any disputes are
department is sends (1)
Nextel, Sprint, Arch itemized list of reported to the
entered on Excel spreadsheets
wireless, and Ameritech charges to their Telecommunication
Spreadsheets. to the Controller net
(3) department s dept. and a credit
One sheet per of any
is granted.
company adjustments
( 1) Report shows MTD and YTD Expenses,
Encumbered-unpaid expenses, $ Free
Fleet Management - Gas and Maintenance
Expenses
Balance, and % Free Balance. This report is
Work Orders are One copy is sent to John Murphy uses used to create MQ.
At month end, Printed report is
generated as work is the department, the report to record (2) Report shows General Funds
work orders are sent to each expenses and transfer
done in Fleet other is used to Departments, account #, recommended
summarized by department and funds between
Management record expense/ budget, current appropriations, YTD
department and Controllers office departments
(4) billing
entered into Excel expenses, and YTD % budget used.
Attachment also includes Outside General
Payroll - Mileage Expense Funds with all categories plus estimated
Department
revenue, YTD revenue received, and YTD
Departments Report is returned Payroll inputs Green Bar Report
completes mileage printed from
% collected. Report generated by
Specials receive blank by 9th of month to mileage, system
and total calculates Specials Database Controllers office and given to John
Account report listing Payroll
department reimbursement. The data from these Murphy (12th Floor room 1243) for
maintains
mileage
reimbursement reports are manually review. The report is reviewed with the
entered into an CFO by the staff and Controller.
Payroll - Medicare Expense Excel spreadsheet, (3) Other daily phone bills are sent through
Medicare Expense Report printed by
Medicare Expense on an AP voucher to be paid
adjustments are department/
from Payroll (4) Fleet Management supports 3
posted after account
Payroll System departments and generates approximately
payroll run
100-150 work orders each month.
Central Supply - Xerox, Postage, and Supplies Expenses (5) This report shows monthly receipts and
Departments Postage, and expenses by departments. Any request for
Manual log of copy Supply Expense adjustments are sent via hardcopy to the
request supplies Postage machine
requests by report sent bi-weekly Controllers office.
via phone/fax and tracks postage by Supply and postage
department (+10%
they are tracked Department expenses per
surcharge)
via VAC system department are entered
into VAC system

11. Conduct Process Reviews to Obtain an Understanding
of the End-to-End Processes
Review the end-to-end process
Understand 80 / 20 Multiple
Data / Paper
Current Processes Rule Departments
Meet with Follow the data Remember the Follow the
Individual and/or paper trail 80/20 rule process from
process owners • Obtain an • Address all department to
• Obtain an understanding of processing department
understanding of the content and procedures • Review the
how day-to-day requirements for especially the process end-to-
activities are each piece of exceptions end both
accomplished data/paper internally and
• Conduct externally
workshops,
benchmarking
and/or surveys

12. Conduct Process Reviews to Obtain an Understanding
of the End-to-End Processes
Review the end-to-end process
Non System System
Inputs / Outputs Be Observant
Data Utilization
Identify all inputs Identify data Pay careful Understand what
and outputs being stored or attention as to all procedures are
• Examples analyzed outside the steps that go accomplished by
include: manually the system into a process the system
keyed data, • Examples • Look for the • More
electronically fed include: unusual one-off importantly
data, reports, A/P spreadsheets, processes identify manual
checks, invoices, databases, index processes that the
statements, etc cards, etc. system should be
handling

13. Conduct Process Reviews to Obtain an Understanding
of the End-to-End Processes
Review the end-to-end process
Policies and Current Develop
P Future State
Procedures Requirements Process Maps
Review existing Document Create current Develop a future
policies, current state process state
procedures and requirements maps (if • Develop future
user manuals • Identify what necessary) state process
• Obtain an processes need to • There is no need maps that
understanding of be accomplished, to create a document process
what is what data needs process map for steps and
documented and to be generated, every process – requirements
then compare it etc. the focus should • Document
to what you have be on the future depending on the
observed requirements level of detail
required (Visio,
PowerPoint)

14. Key Steps when Sitting with a Process Owner -
Question Every Activity
Always Ask Why Don’t Assume
End-to-End
Processes
Understand the Need
for all Inputs and
Outputs

15. Key Steps when Sitting with a Process Owner -
Question Every Activity
Always Ask Why
 What is the activity trying to accomplish?
End-to-End
Processes
 Is it is necessary
 Does it add value?
 Question why
 Always ask and then continue to ask
 Why a process or procedure is being
performed?
 Why isn’t the system performing it?
 Why an output is needed?

16. Key Steps when Sitting with a Process Owner -
Question Every Activity
Don’t Assume
 Don’t assume anything
End-to-End
Processes
 Ask “dumb” questions
 Politely challenge
 Validate what you have been told
 Compare it to the data or paper trail and/or
documentation
 Check with other process owners /
departments
 Check with other staff performing the
same or similar tasks

17. Key Steps when Sitting with a Process Owner -
Question Every Activity
Understand the Need for All Inputs and Outputs
 Review all inputs and outputs
End-to-End
Processes
 Question what the data is needed for
 Determine it’s accuracy
 Question what users or other departments
do with the data
 Ask the user what they would like in the
ideal world
 Question if the frequency is appropriate

18. Key Steps when Sitting with a Process Owner -
Question Every Activity
Question Every Activity
End-to-End
Processes  Identify the root cause of problems rather than
the symptoms
 Question whether the activity is necessary
 Question if the frequency is appropriate
 Determine if the activity could be
accomplished in another fashion
 Always question why a manual process is not
being performed by the system

19. Utilize Process Improvement Methodologies to
Improve Finance and Accounting
Agenda
Introduction
Conducting Process Reviews
What to Look For
Designing the Future State
Other Keys to Success

20. Improvement Opportunities - What to Look For
 Utilize system self-service functionality whenever possible
Self
 Take advantage of vendor provided self-service capabilities
Service
 Question why every piece of paper in a process is necessary
Paper  Wherever possible replace paper with an electronic solution
 Fully integrate all systems
Integration  Require large volume vendors to provide electronic feeds
 Provide electronic feeds to vendors

21. Improvement Opportunities - What to Look For
 Obtain a through understanding of the process before developing training
Training  Training should incorporate both process and technology
 Training should be developed with the process owners skill sets in mind
 Anyone that requires access to data should have the appropriate access
 Ideally access should be provided electronically rather then on paper
Access to Data
 Access to data should be timely
 Reports should be developed with the user in mind
 Review how process owners are using their reports
Reporting
 Identify user needs that are not being met by current reports
 Reports for routine activities should include all required data on a single report

22. Improvement Opportunities - What to Look For
User Manuals,  Develop user manuals, policies and procedures that cover the entire process
Policies & rather then a “How to use the software” solution
Procedures
 Ideally all data should be fed to the system electronically
Data  Manually input data should never be keyed more then once
Input  Eliminate manual forms by requiring staff to complete electronic forms via the
web or directly into the system using self-service functionality

23. Potential Clues to Lookout for:
Question Every Activity Always Ask Why
 Manual forms  Errors / mistakes
 Multiple reviews and approvals  Unreasonably long cycle time
 Manual tracking of  Multiple data entry points
documentation  Manual keying of data
 Labor intensive processes  Duplicate keying of data
 Excessive handoffs  Bottlenecks
 Duplication of effort  Unnecessary procedures
 Unnecessary use of paper  Unused data or reports
 Manual file folders  Shadow processes
 Huge piles of papers on desks  Excel spreadsheets
 Excessive need for file cabinets  Shadow systems (e.g. data
 Routine missed deadlines warehouse)
 Non-value added activities  Routine Delays

24. Is your Accounting System Working the way it’s
Supposed to?
Accounting System Not Delivering
Many system issues are not the result of the software.

25. Is your Accounting System Working the way it’s
Supposed to?
Accounting System Not Delivering
Many system issues are not the result of the software.
They were caused by a flawed implementation.

26. Implementing new technology does not guarantee
efficiency
Teacher
After data is Based on the type Custodial - Plant
completes Principal or Dept. School clerk
entered, Non site-based budget of purchase, Operations
requisition form or Head approves enters data into
requisition will be purchases goes to an requisition is
fills out pre-printed and signs system from Teacher
funneled into the approver initially routed to one of Exceptional After data is Based on the type Custodial - Plant
list for items requisition requisition completes Principal or Dept. School clerk
following the following:(1) Children Division entered, Non site-based budget of purchase, Operations
needed requisition form or Head approves enters data into
requisition will be purchases goes to an requisition is
fills out pre-printed and signs system from
Site-based budget purchases Applied funneled into the approver initially routed to one of Exceptional
list for items requisition requisition
go directly to Finance Technology following the following:(1) Children Division
needed
Career
Purchases from a contract Development Site-based budget purchases Applied
Type A
company or pre-printed list go directly to Finance Technology
Finance Dept. (2) Career
Library Services Purchases from a contract
Purchases not from a contract Type A Development
company or pre-printed list
Type B company or pre-printed list Finance Dept. (2)
regardless of price Chief Academic Library Services
Purchasing Dept/ Officer-Textbooks Purchases not from a contract
Senior buyers Type B company or pre-printed list
Senior buyers
review requisition regardless of price
receives Chief Academic
proof, checks for Teaching &
purchases in Purchasing Dept/ Officer-Textbooks
errors (4) Type 2 Learning Assmt. Senior buyers
"requisition proof" Senior buyers
review requisition
receives
proof, checks for Teaching &
purchases in
errors (4) Type 2 Learning Assmt.
Interscholastic "requisition proof"
Buyer requests Requisition proof
Other purchases
quotes/bids from is generated from
are routed to a Buyer receives
New Technology
vendors (fax, mail, information
buyer - based on buyer's copy Supplemental Interscholastic
or phone) Request entered into Buyer requests Requisition proof
assignment Funds-Budget & Other purchases
for Quotation form system quotes/bids from is generated from
Management (3) are routed to a Buyer receives
If errors Type 1 vendors (fax, mail, information
buyer - based on buyer's copy Supplemental
If no errors found are found or phone) Request entered into
assignment Funds-Budget &
on requisition proof for Quotation form system
Management (3)
If errors Type 1
If no errors found are found
Purchase order is Senior buyers will on requisition proof
generated from the correct errors and
requisition proof another proof is
the next day Brown/yellow copy generated Purchase order is Senior buyers will
Finance Dept. generated from the correct errors and
sent to school Vendor receives
matches invoice to requisition proof another proof is
(brown copy is PO and ships
receiver's report the next day generated
receivers report) order to school Brown/yellow copy
Purchases orders Finance Dept.
Buyer signs and sent to school Vendor receives
printed at Senior buyers matches invoice to
Blue copy sent to dates PO; sends (brown copy is PO and ships
Southside location separate POs (5 receiver's report
Controllers Office to vendor by mail receivers report) order to school
and delivered to copies) Purchases orders
or fax Vendor sends Buyer signs and
Admin Bldg. System generates printed at Senior buyers
invoice to Finance Blue copy sent to dates PO; sends
payment when Southside location separate POs (5
White PO copy Dept. Controllers Office to vendor by mail
both invoice and and delivered to copies)
routed back to or fax Vendor sends
receiver's report Admin Bldg. System generates
original buyer invoice to Finance
are entered into White PO copy payment when
system Dept. both invoice and
Orange copy kept School confirms routed back to
original buyer receiver's report
on file at purchase by
are entered into
purchasing office sending receivers
system
report to Finance Orange copy kept School confirms
Dept. (5) on file at purchase by
purchasing office sending receivers
report to Finance
Dept. (5)
Inefficient New Inefficient
Old Process Technology New Process

27. Why Doesn’t your System Perform as Promised?
Who’s to Blame
1 Project ImplementationTeam
2 Process Owners
3 Training
4 Consultants
5 Other

28. Successful Implementations Address more then
Technology
Best Practices
Technology
Process
The Foundation of a Successful System Includes Process and Best Practices

29. Best Practices and System Functionality Knowledge
How do you obtain knowledge of Best Practices and
System Functionality?
Best Practices System Functionality
 Professional organizations  User manuals
 Conferences  Vendors web site
 Other companies  Books
 Books  Consultants
 Consultants

30. Utilize Process Improvement Methodologies to
Improve Finance and Accounting
Agenda
Introduction
Conducting Process Reviews
What to Look For
Designing the Future State
Other Keys to Success

31. Developing a Future State
Payroll Process (High Level View) - Pre Software Interface
Visioning
Budget
Provide Account
Codes as needed
Prepare Supp
Field
Prepare T&L
Time Reports &
Reports
Overtime Reports
Prepare Payroll
Review and Notification Forms
HR
approve to process
adjustments
Review and
Payroll
Review and
correct Supp Time Run final calc and Distribute checks
Create Paysheets correct T&L Update Paysheets
Reports and OT confirm and advices
Reports
Reports
Operations-
Strawman Data Entry
Input Supp Time
Reports & OT Input T&L reports
Reports
Operations- IS
Produce checks,
Run Pay & Time advices & DD file
files into PS for bank, and print
reports
PS Project
Reconcile payroll
• This is an example of a to-be process map.
• Process maps may be prepared using Visio, PowerPoint
Whiteboard or on paper depending on the level of sophistication required.
Your Logo

32. Utilize Process Improvement Methodologies to
Improve Accounting
Agenda
Introduction
Conducting Process Reviews
What to Look For
Designing the Future State
Other Keys to Success
32

33. It is important to Understand why People are
Resistant to Change
Potential
Threat

34. It is important to Understand why People are
Resistant to Change
Potential
Threat
Fear of the
Unknown

35. It is important to Understand why People are
Resistant to Change
Potential Threat of
Threat Obsolescence
Fear of the
Unknown

36. It is important to Understand why People are
Resistant to Change
Potential Threat of
Threat Obsolescence
Fear of the Loss of
Unknown Kingdom /
Status

37. It is important to Understand why People are
Resistant to Change
Potential Threat of Fear of
Threat Obsolescence Something
New
Fear of the Loss of
Unknown Kingdom /
Status

38. It is important to Understand why People are
Resistant to Change
Potential Threat of Fear of
Threat Obsolescence Something
New
Fear of the Loss of Change May
Unknown Kingdom / Uncover
Status Hidden Issues

39. It is important to Understand why People are
Resistant to Change
Potential Fear of Changes
Threat of May Result
Threat Obsolescence Something
New in Additional
Workload
Fear of the Loss of Change May
Unknown Kingdom / Uncover
Status Hidden Issues

40. Understanding Project Dynamics
Communicate
Politics • Communicate positive
results
• Understand the political
• Communicate as
landscape
appropriate – Remember
• Use politics to your
the who, what, where,
advantage
when and why
Change • Communicate regularly
Management
Build Alliances
Quick Wins
• Fix the easy things first • Win over adversaries
• Gain traction • Make IT part of the team
• Get Finance involved
Resources
• Make sure the proper resources are on
the team and that there is an adequate
budget with realistic timelines

41. Executive Sponsorship Plays a Key Role
Support Leadership
Provides funding, Provides direction, advice
appropriate resources and and credibility
opens doors when
necessary
Executive
Sponsorship
Values Stick
Sets the tone, Provides the appropriate
communicates the leverage when necessary
importance of the project
to the organization
Carrot
Provides rewards and
incentives for success

42. Improvements are Easier to Address then Many
Believe
The Time Required For Improvement Varies
 Improvements can be accomplished within a day or can
take months
– Quick hits
– Process adjustments / realignment
– Significant changes
Implement quick wins to gain credibility and traction.

43. I Challenge You to Try This!!
You’ll be Amazed at What You Find!
Set aside five to ten hours over the course of a week or two
and see what you can uncover!

44. Free “How to”
Helpful Hints for Improving the
Productivity of Accounting
Tom Sonde, Principal
(973) 722-9304
tsonde@silverroad.net
SilverRoad.net

45. Thank you for
your attention!
Any Questions?

46. Tom Sonde Biography
Tom Sonde
Tom is a principal with Silver Road Solutions, a management consulting firm specializing in helping
accounting & finance organizations be more productive. He began performing process improvement work
while at The Dun & Bradstreet Corporation. He subsequently worked at KPMG Consulting and was VP
Global Business Transformation at Misys where he redesigned their global accounting and finance
processes during an SAP implementation.
Tom has extensive experience in designing and implementing process improvement initiatives and has
published several articles on this topic. Including one in the December issue of the Journal of Accountancy.
For additional information lease visit silverroad.net
Tom Sonde, Principal
SilverRoad Solutions
1362 Tamarack Road
Manasquan, NJ 08736
(973) 722-9304
tsonde@silverroad.net
Silverroad.net
Copyright © 2012 SilverRoad Solutions.

47. About Us
SilverRoad Solutions is an innovative management consulting firm specializing in,
Accounting System Optimization, Expense Reduction, Process Improvement and Business
Process Management services. We assist organizations in successfully implementing
transformational change.
To learn more about how we can lower your costs while improving the productivity of your
organization please contact us at info@silverroad.net or by calling (973) 722-9304.
Copyright © 2012 SilverRoad Solutions.
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