How Kawartha Lakes is able to generate $30,000 more in annual interest
When it comes to running a successful business it is critical to know how much money you have coming in, as well as how much money you have going out. Running a city is no different.
For City of Kawartha Lakes Treasurer Carolyn Daynes being able to take part in the Initiative’s Management Lean Six Sigma Green Belt training in the fall, provided the tools necessary to look at the Accounts Payable process and work with a team to find efficiencies within the current system.
“When we talk about AP processing we’re looking at all external invoices that come into the City,” explained Ms. Daynes. “Our department handles in excess of 10,000 invoices annually.”
Ms. Daynes said following the Green Belt training it became obvious AP processing was a natural project.
Under the old AP process, invoices would be sent directly to individual departments and then coded, after which they would be sent to AP for input and payment. The challenge, explained Ms. Daynes, is that there was no central way for AP to know how many invoices were sitting on desks in different departments if they hadn’t filtered to the AP department.
“We didn’t know how much money we had because we didn’t know what invoices are still out there,” Ms. Daynes explained. “Changing the process will allow AP to see exactly how much we have and exactly how much we have to pay on any given day.”
Working with her team including Manager of AP and Cost Accounting Bob Williams, AP Clerk Darline Buckley, Financial Coordinator of Community Services and Public Works Laurie Lawder, Junior Accountant Leanne Mitchell, Senior Accountant’s Sandra Shorkey and Ashley McQuade and Executive Assistant to the Director of Public Works Ann Hayter, Ms. Daynes said her group was able to look at the current processes and the steps to address breakdowns in the system.
“This is really a group process and by working with the tools and working through the process the result is what it is,” said Ms. Daynes. “This Green Belt project gave me the time to work through the process with a team of very knowledgeable individuals and the Green Belt process takes the personality out of it.”
As a result of the AP Green Belt project, all invoices will now come directly to AP first, and then sent to individual departments electronically with deadlines for approving clearly identified.
“By having all of the invoices come to one central location first, we can identify very quickly how much money we have on hand, as well as how much money we have to pay out at any given time,” said Ms. Daynes.
What that ultimately means for the City of Kawartha Lakes is savings and identified revenue generation of about $36,600 annually.
The project team identified an increase in interest payments to the City from investments in the amount of $30,000, while cost reductions will occur in the number of file folders required ($500 savings), a reduction in paper ($1,000 savings), fewer filing cabinets as a result of moving to an electronic filing system ($1,000 savings), a reduction in Overtime in the AP Department ($4,000 savings) and a reduction in storage requirements at the records centre ($104 savings).
“I’m really looking forward to my next project,” said Ms. Daynes. “The Lean Six Sigma Green Belt projects really help to formalize the processes and we have an opportunity to work with some extremely knowledgeable and talented staff here in the City of Kawartha Lakes.”