Post on 11-Nov-2014
description
transcript
1
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)
SERVICES DIVISION
2
2
• 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 dedicated for the reimbursement process.
Introduction
3
3
• 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.
Business Case
4
Stakeholders
• Internal customer departments
– Administration
– Public Relations
– Accounts
– Mail Room
– Cashier
– Kanoo JVs
• Kanoo employees
• Internal Audit Department
4
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
and manual efforts 5
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%.
6
7
Project Team
• The teams involved:
– Service Accountant
– Administration Manager
– IT Department
– Software developer (Kanoo JV).
7
8
Project Timeframe
– Start Date January, 2010
– Target completion by February, 2010.
8
9
Process Flow (Before)
9
Start
Employee incurs expense
Claimant sends supporting
documents to Payroll
Accountant, as and when
the claimant wishes
Company policies
for eligibility for
claiming expenses
Verify documents
submitted
All OK? Not OK
Payroll Accountant
prepares a Cash Payment
Voucher (CPV) giving
account code
Account Codes
Directory
Voucher with supporting
documents is checked by
Admin Staff
Approval by Admin
Manager
Claimant signs the voucher
in “Received by” column
Admin staff will submit to
Payroll Accountant
Payroll Accountant
distributes the approved
vouchers to the concerned
Claimants
Gives to Deptt
Secretary
Claimant in
Kanoo Main
Office?
Messenger hands
over cash to Deptt
Secy
Deptt Secy arranges
to send cash to the
Claimant
End
OK
Yes
No
Large number of status
query and follow up
calls from claimants
Loss of
confidentiality
(when
multiple
persons with
same name)
Paper
consumption (600
sheets + 300
envelops per
month)
Delays in transit (documents,
voucher, cash) for the people
working outside the Main
Office Deptt. Messenger
Goes to Cashier
Cashier checks,
pays cash and
enters data in the
Financial System
Messenger /
claimant signs the
CPV
Voucher lying in
deptt when
claimant on
vacation
Cash /
voucher lost
in transit
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
– Miscellaneous 10
11
Modified Process Start
Employee incurs expense
Claimant scans the
expense bills and emails to
Payroll Accountant before
20th of each month
Claimant scans the
expense bills and emails to
Payroll Accountant
Payroll Accountant checks
the bill, if OK adds to the
appropriate expense head
in payroll system for the
employee
Payroll system
automatically generates
entries for the financial
system
Reimbursed expenses are
listed in the Salary Slip
Salary slip is uploaded on
Kanoo Intranet
Salary + reimbursement
amount is credited to
employees’ Bank
Accounts
Employee downloads
Salary Slip
Report on expense
reimbursement is
generated and presented
to Admin Manager for
approval
Note:
For urgent payments,
weekly processing of WPS
can be made.
12
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.
14
Communication of Change
• Staff were informed of the new system
through a circular
• Manual Expense Claim Vouchers were
discontinued from April 2010.
14
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.
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
16
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.
17
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.
18
19
Recognition
• Appreciation received from external and internal
customers.
• Appreciation of project team by Group Management.
19