Client Profile
A Florida head quartered housing development giant who develops communities and housings for residents in most parts of East Coast of America. It also offers consulting services for property development and construction management. Firm’s projects include affordable housings, multifamily communities, public housing redevelopments, and public-private affordable housings, as well as high-rise residential, single-family residential, mixed-use, historic rehabilitation, public housing revitalization, LEED-certified, transit oriented, historic, low-income rental housing, and neighborhood transformation developments. Over the period they have developed more than 60 properties with 68,000 units in 3 different cities of East Coast of USA.
Overview
The account activities of all the properties were being done by a local accounting company. To reduce costs and improve the month closing timelines, the client decided to use a hybrid solution combining a small in house accounting team with a larger offshore accounting team based in India to reduce costs and yet retain control over the processes. The key challenge was the short window for the entire transition of accounts payable and property accounting activities. The existing AP volume of about 4000 invoices across 66 properties was to be transitioned in a short time frame of one month
Challenges
- Design an Accounts Payable Process: AP processing was being managed by a local accounting vendor who had the complete process knowledge. There was a significant absence of existing process documentation at the client end. Hence the entire process was designed and implemented through active involvement of our team with the client’s finance controller
- Rapid Process Volume Ramp Up: Due to short transition window, there was a ramp of daily processing volume from 50 invoices to 400 invoices in first week. By the end of second week, we were processing the full invoice volume. We also cleared a back-log of close to two weeks of unprocessed invoices that had got held up due to the migration from their existing accounting service vendor.
- Accuracy & Completeness of Process: Limited resources at client end meant that the quality control, migration and problem handling was majorly being handled by India end. There was lack in timely processing of vendor & utility bills, due to which firm was paying unnecessary late fees
Solution
Expertise & Economical Staffing
We have provided affordable staffing with 2 accountants to meet initial requirement of firm. These are in-turn supervised by a Team Leader, who is also responsible for communication and coordination with the client. The entire team under supervision of client’s finance controller has mapped the entire process, prepared operating manual and operating formats. Special emphasis was laid on establishing clear quality control mechanisms. In the first one month, a complete review of the entered invoices was done by the Team Leader to identify errors etc. After the first month, this was changed to selective quality control by picking up random work samples.
Quickly & Accurately Back Log Processing
Accounts Payable team has smoothly transmitted data from previous local accounting vendor with limited co-operation. They managed to streamline the processing of data entry by entering 350 – 400 invoices for 60 properties on daily basis to clear back log of around 4000 invoices within a month. Daily target setting and monitoring helped in establishing good invoicing through-put.
Results
Complete migration of Accounts Payable process completed in one month. By the end of for month, the team was processing the entire monthly invoice volume from India
Prior period invoice back-log of two weeks was cleared
Accuracy percentage of above 96% in first week and 98% by second week. By the end of first month, less than 1% of invoices were flagged for corrections/rework by the client
Prompt processing of invoices improved vendor relations and terms for the client
New activities under AP added to India team’s responsibilities
Client also transitioned other accounting work related to monthly finalization and reporting to India
