Page 275 - Accounting Best Practices

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General Best Practices
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However, these are temporary issues whose impact on the backlog can be elimi-
nated within a few days.
Cost: Installation time:
13–6 IMPLEMENT PROCESS-CENTERING

A major problem at many companies is the inordinate amount of time it takes to
complete a process. For example, insurance companies are famous for spending
many weeks to review an insurance claim and issue a payment check, when the
total amount of work required is under an hour. The long time period from the
beginning to the end of the process is usually due to the number of transfers
between employees. For example, the insurance branch office may forward a claim
to an insurance adjuster, who passes it along to a manager if the amount exceeds a
set level, or who hands it off to another person who checks to see if the claim may
be fraudulent or if the claimant has an unusually long history of claims, then moves
the paperwork to another person who issues checks, and then returns the entire
packet to the insurance branch office. Insurance is just an example—upon further
investigation, it is common to find that all companies invest a shocking amount of
time in moving paperwork between a multitude of employees. A related problem is
that transactions can be lost when they are moved between employees. Further, it is
difficult to pin blame on anyone when a transaction is improperly completed
because there are so many people involved in the process. Thus, spreading work
among too many people opens a virtual Pandora’s box of troubles.
The best practice that resolves this problem is called process-centering. Its
underlying principle is to cluster as many work tasks for a single process as pos-
sible with a single person. By doing so, there are fewer transfers of documenta-
tion, which reduces the amount of time lost during these movements, while at the
same time eliminating the risk that paperwork will be lost. Further, employees
have much more complete and fulfilling jobs since they see a much larger part of
the process and have a better feeling for how the entire process works. And best
of all for a company, the time needed to complete transactions drops drastically,
sometimes to less than 10 percent of the amount previously needed.
The main problem with process-centering is employee resistance. This is a
reengineering best practice, which means that the old process is ripped up and
replaced with an entirely new workflow, which makes many employees nervous
about their jobs, or if they will even have a job when the changes are complete.
Accordingly, they usually are not pleased with the prospect of a new system and
resist vigorously, or at least are of any assistance. Only excellent communications
and a strong commitment by top management to completing the project will
make this best practice operational, given the likely level of resistance to it.

Cost: Installation time: