description != null):?> keywords != null):?> Accounts Payable Optimization | Highland Group Live (new)

Accounts Payable Optimization

NEEDS-BASED RESULTS

 

Accounts Payable Optimization

SITUATION

South American mine needed help to fix a fragmented Purchase to Pay process and reduce supplier and government fines resulting from late payments.

DRIVER GOAL

  • Clarify organizational and functional improvement opportunities.
  • Upgrade financial “cash and income” performance from payables.

RESULT

  • Reduced Supplier Fines by R$294 thousand.
  • Reduced Government Fines by R$2.9 million.
  • Consolidated the AP organization.
CS-369 large

Case Study

Consolidate & Optimize Accounts Payable at South American Gold Mine

Issue

A high-level assessment at a South American gold mine revealed a traditional mining culture focused on throughput—no working capital reports, targets, goals or key performance indicators (KPIs). Furthermore, the Purchase to Pay process was fragmented, giving poor visibility of cash requirements/forecasting and leading to poor cash management and supplier and government fines resulting from late payments. Accounts Payable (AP) activities were decentralized, with each mine having its own AP Department and following non-standardized procedures. Goods and materials were received at the mines without purchase orders, invoices, or contracts—no effective three-way match was in place.

Highland Approach

Detailed analysis produced a targeted action plan for cross-functional working teams. This personnel-engaging approach helped to change what had once been a “silo” culture into a collaborative one. Measurable financial results were obtained through the implementation of several initiatives, including reengineering several processes around the purchase order and payables functions, staff training and rationalization, and the development of a management dashboard with twelve key performance indicators—including previously non-existent working capital metrics—to ensure the sustainability of project results.

Actions Taken

  • Established “fiscal posts” at mine entrances.
  • Centralized invoices in fiscal area at mine sites.
  • Established electronic PO approval.
  • Consolidated Accounts Payable.
  • Implemented continuous flow.
  • Created electronic receipt of invoices.
  • Formalized P-Card processes.
  • Reduced government taxes and fines.
  • Renegotiated payment frequency.
  • Created a working capital KPI dashboard.
  • Modified floor area layout.
  • Standardized Accounts Payable policies and procedures.

Reduced fines by

R3.2m

by implementing a System for Managing and consolidating Accounts Payable

Related Information

industry-based

subject matter-based

Presenting Analyst

John is a Senior Executive and Presenting Analyst at The Highland Group with more than 30 years of leadership experience in management consulting. He has led hundreds of global consulting engagements that delivered an array of operational improvement solutions with total client benefits exceeding $1 billion dollars.

Head of Organizational Development

Don is an internationally recognized organizational change and development expert with 33 years of global experience in partnering with results-oriented clients to achieve sustainable behavioral change and targeted bottom-line results in productivity, quality and profitability. He is recognized for fostering high levels of enterprise-wide sustainable performance improvement ownership. Don’s key strengths include his ability to engage stakeholders at all levels, create collaborative environments and work within the culture to achieve leadership, management and employee breakthrough results.

Project Leader

Financial Services

North America

Brandon is a senior project leader and consultant with more than 12 years of experience in helping financial services firms maximize revenue and control costs through continuous improvement. He specializes in implementing efficiency, service and quality process enhancements in Fortune 500 companies by utilizing Lean and Six Sigma principles.

insights

  • The Tell

    November 11, 2011

    Myra Saefong