Posted by: knightbird | June 18, 2010

Payroll Improvements

A team here at Chugachmiut just conducted a 5S + 2 event on a shared drive, and they presented the results to me this morning. I have asked our Lean Coordinator to write a piece about that event for publication in this blog. During these presentations I try to share the vision of Lean Management at Chugachmiut with the team making the presentation. I stress how important it is to record our improvements as part of our organizational knowledge system. Often we forget about the many accomplishments we have had, and I shared this one with the group.

Most financial accounting packages have the ability to put signatures on checks. Our old package did not. I asked our accounting staff how much time they spent on an average day looking for check signers. They told me that it took them from 30 to 60 minutes every day, especially when they had checks that required 2 signers. Using 45 minutes as the daily average, and having 250 workdays annually, we estimated that check signing took an accounting employee 25 days worth of effort annually. We estimated that check signers used half of that time to interrupt their work, review and sign checks and return to work, or 12.5 days of effort annually. After the checks were signed, the way the system continued required additional time for the accounting clerk to process the checks. Building a system of automatic check signing with appropriate accounting controls saved Chugachmiut approximately 75 days of effort (waste), the equivalent of one full pay period.

Many small savings add up quickly. Our new software accounting package has the ability to put signatures on checks, and eliminate the waste of seeking out check signers.  Small savings and continuously eliminating waste provides substantial value back to an organization.

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