To the Rescue - Putting an Implementation Project back on Course | Case Study by András Radvánszky of Reed Hill Consulting
The Finance Manager was simply asking for a consultant that “spoke her language” and could roll-out her ideas effectively. If something was genuinely not possible, then this person was expected to explain it concisely and propose a workable alternative.
The existing vendor had sent at least four different consultants during the project and each time she needed to revisit the agreed system requirements with the individual arriving onsite, then double-check any configuration that they made. There seemed to be no hand-over from one consultant to the next. Her impression of the project service delivery to that point was not good.
So, the project management committee at Wireless Logic decided to enlist the help of REED HILL CONSULTANCY to give the implementation project that final push to get it over the line. The consultant sent to achieve this was András Radvánszky, an experienced and very capable Financials and Technical consultant who also has hands-on experience with the Distribution Module and other bolt-on products.
WHAT WE DID
Of the nineteen measurable deliverables that András completed, two have been chosen for this case study:
Importing invoices from the external billing system
This billing system is a proprietary in-house solution that records actual time and data used by Wireless Logic customers per device. The data is extremely detailed which is essential to provide the monthly network usage invoices that are billed for each contract. The data volume in this system is too excessive to give analytical meaning for an accounting system so it needs to be aggregated to key measurement metrics and then imported into Sage X3.
The accounting system would be the single source for the accounts department to collect and chase overdue customer payments. The method to do this in the legacy system was to export the data to a comma-separated-value (CSV) file which would be aggregated manually in Excel before importing. This was very time-consuming and prone to human error. It was decided that the new accounting system should remove the human element and simplify the process.
So, an import template needed to be configured and a good, concise specification document written for the in-house software developer to write the data export routine from the billing system. The import could be launched manually by the responsible Sage X3 user and once all billing system export anomalies were completely addressed, Sage X3 would be configured to run the import automatically.
This improved import method resulted in a timesaving of about 4 days every month. An opportunity to improve the cash collection procedure by approximately 7 days became apparent once the accuracy of billing data import had been achieved. It was possible to reutilise the payment proposal function to implement an efficient direct-debit process. This function was configured to identify customer invoices that should be settled by direct-debit to process these and prepare a direct-debit bank file that would be uploaded to the company’s internet banking system securely and seamlessly.
The legacy system [once again], required that this process be done manually with Excel. This was an area of concern with the company’s auditors. Customer payments in the legacy system were often collected 7 days after the contractual due date, where most payment terms were 14 days from invoice. For some other payment terms of 30 days from invoice, the effective collection was 21 days late. This was because these invoices would miss the direct-debit collection run and therefore be postponed to the next run on the following month. Now direct-debits are collected on or the day after the due-date.
Recognising Cost of Sales when issuing Sales Invoices
Most ERP systems will normally post the Cost of Sale value to the Profit/Loss statement when goods are shipped. Wireless Logic does not process invoices immediately after that because of extra rebate calculations, usage discounts and other customer incentives, so the effect was that the gross profit of the company was being understated. Fortunately the Sage X3 ERP will allow changes to be made to the way journals will be posted in the General Ledger and therefore with a little know-how, the Stock Movement journal configuration was altered to retain the Cost of Sales (stock shipment value) in the Balance Sheet when goods are shipped.
Another journal will be posted to transfer this movement value to the Profit/Loss report (into the Cost of Sales account) when an Invoice is issued to the customer. All movements will have precise comments so that individual transactions can be very clearly identified and the relationship between the shipment and the Invoice, clearly traced.
Significant gains have been made by the billing system integration and the direct-debit collection processes in the time it now takes to process the invoices, send them to their clients for scrutiny and collect the direct-debits on the due date. Previously, a fixed payment process was run around the 21st of every month, which used to be a compromise made by the accounts team considering the delay in importing the billing information and actual payment processing.
Their cash-flow cycle has effectively improved by a mean average of about 10 days per month. With the Cost of Sales journal now reflecting the Gross Profit more accurately, the Wireless Logic board and their investors are more confident that the profit presented in the accounts are appropriate and consistent.
What aspect of the project are you most proud of?
End users have bought into the new accounts system. The company's directors are confident that they did choose the right software and Wireless Logic continue to use REED HILL CONSULTING for ad hoc tasks that prove too difficult for the ERP system vendor.