FOCUS: Invoicing Process Improvement
The branch operation serving this country had an inefficient system of processing invoices and sending them to their customers. Each invoice was being prepared manually. In addition, their administrative staff was spending too much time reviewing the differences between invoice orders and original offers for the invoiced work. As a result, they typically sent invoices to customers one week later than their promised date.
A Lean Six Sigma team was formed to analyze the process and develop recommendations on how to improve the invoicing process. A DMAIC step-by-step approach was implemented and various lean and six sigma tools were utilized. As a result, the team made the following improvements:
– They established a system to import the Sales department’s electronic offer file, with all of the invoice elements, to a user-friendly database
– Then, with a few keystrokes, the necessary items such as dates, shipment addresses and invoice orders are now automatically entered into the database
– The database information is maintained, where an invoice can be quickly generated
– Redundant databases were eliminated
As a result of this project, invoices are now posted to the customer on time. The changes led to a 73% reduction in processing time for invoices that are sent once a month and a 58% reduction in processing time for invoices that are sent as soon as material leaves the warehouse.
* Due to nondisclosure agreements, the organization referenced in this example cannot be disclosed.