City Government Reduces Financial Reporting Time By 73% With Kure
PROJECT SUMMARY
Business Case
Timely and accurate financial reports improve decision making ability of the administration and council.
Root Cause Analysis
Outside vendor reporting delays.
Not enough non-critical personnel are trained cross-functionally.
Down-line staff are not explicitly trained to complete the entry and verification steps.
Solutions Implemented
Cross-train current staff to complete and verify process steps before handoff to CFO.
Project Results
Reduction in time necessary to produce and provide up-to-date financial position information to City Council and citizens.
Better-trained and more motivated staff have a sense of pride in their roles and responsibilities.
Outside stakeholders such as banks and rating agencies have up-to-date financial information.
Summary
The problem: This city government needed to tackle the persistent delays in completing monthly financial reports. These delays were causing significant issues for the administration, as they often had to make critical financial decisions without timely and accurate information.
With Kure, the time required to produce and provide up-to-date financial information to the City Council and citizens was significantly reduced from 25 days to 6.7 days—a 73% reduction!
The Problem
Timely financial reporting is essential for effective governance and making informed decisions. Unfortunately, our delays meant that the administration was often working with outdated financial data, leading to decisions that were less effective and sometimes even risky. This not only affected our internal efficiency but also began to erode the trust of key stakeholders like banks and rating agencies. Moreover, the City Council and the citizens, who rely on this data to understand the city’s financial health, were left in the dark, which further compounded the problem.
The Approach
To address this challenge, the process team chose to implement Kure, an AI-driven process improvement tool that uses the DMAIC (Define, Measure, Analyze, Improve, Control) methodology. Kure offered a well-organized workflow, guiding them through each phase of the project with practical examples, helpful suggestions, and AI-powered data analysis. This approach helped them concentrate on resolving the core issues efficiently, significantly speeding up the completion of our improvements beyond the initial expectations.
The Root Causes
With Kure's 5 Whys, they identified three main root causes for the delays in our financial reporting:
Outside Vendor Reporting Delays: They found that our reliance on external vendors for key financial data was a major contributor to their delays. These vendors were often late in providing the necessary information, which held up the entire process.
Lack of Cross-Functional Training: Their team wasn’t sufficiently cross-trained, which meant that only specific individuals could handle certain stages of the reporting process. This created bottlenecks, especially when those individuals were unavailable.
Insufficient Training for Entry-Level Staff: The staff responsible for initial data entry and verification lacked proper training, leading to errors and inefficiencies that further slowed down our reporting process.
The Solutions
The process team implemented several solutions to address these root causes:
Cross-Training Current Staff: They made sure that more team members were trained to handle various stages of the financial reporting process, reducing their dependency on specific individuals and increasing overall flexibility.
Enhanced Training Programs: They provided targeted training to their entry-level staff to improve accuracy and efficiency in data entry and verification, which helped speed up the process and reduce errors.
Vendor Management Improvements: The process team established clearer communication and stricter deadlines with vendors, ensuring that they provided the necessary data on time and held them accountable when they didn’t.
The Results
The results of their efforts were significant:
Reduced Completion Time: They slashed the time needed to produce and provide up-to-date financial reports from 25 days down to just 6.7 days—a 73% reduction. This allowed for more timely and informed decision-making.
Improved Staff Competence and Morale: The cross-training and additional skill-building efforts left their staff feeling more competent and motivated, leading to a more engaged and effective workforce.
Enhanced Stakeholder Confidence: With timely and accurate financial reports, their credibility with external stakeholders, including banks and rating agencies, improved. This boost in confidence could lead to better financial terms and ratings in the future.
Conclusion
This project was a game-changer for their financial reporting process. By using Kure’s innovative process improvement workflow, they were able to address their challenges quickly and effectively. The improvements made not only increased the efficiency of their reporting but also boosted staff morale and restored stakeholder confidence. This experience underscored the critical importance of timely and accurate financial data in governance and highlighted the value of using advanced tools like Kure to drive lasting improvements.
*We value our clients’ confidentiality. While we’ve changed their names, the results are real.
