Government Agency Reduced Vendor Payment Time By 95% With Kure
PROJECT SUMMARY
Problem: In government operations, speed and efficiency aren't just nice-to-haves—they're absolute game-changers! One forward-thinking agency faced a common but critical challenge: vendors were waiting far too long to get paid. With payments dragging out to an average of 56 days, vendor relationships were strained, and day-to-day operations were suffering.
Ready for positive change, the organization embarked on an improvement journey that would transform its outdated payment processes into a streamlined powerhouse of efficiency. The results? Payment times plummeted from a sluggish 56 days to just 3 days—a remarkable 95% reduction that delighted vendors and revitalized operations!
The Problem
Government agencies juggle unique hurdles when managing their financial processes. With public money at stake and rigorous accountability standards to meet, procedures need to be both meticulous and swift. Unfortunately, many agencies get bogged down by legacy systems and complex bureaucratic requirements that create frustrating bottlenecks.
In this case, vendors were increasingly vocal about payment delays. While guidelines specified that payments should be processed within 10 days after invoice submission to Accounts Payable, the actual timeline stretched to nearly two months. This excessive wait time didn't just annoy vendors—it jeopardized essential partnerships and threatened to unravel the smooth functioning of government operations.
As vendor complaints mounted and relationships deteriorated, process improvement became absolutely vital to the agency's continued success. A team of skilled professionals, led by a project leader pursuing Lean Six Sigma Green Belt Training & Certification from GLSS, came together to tackle this pressing challenge. The team leveraged Kure, an innovative AI-powered process improvement platform that guides teams through the DMAIC methodology with smart examples, helpful guidance, tailored suggestions, and powerful data analysis capabilities.
The Root Causes
The team's investigation uncovered two primary culprits behind the payment delays:
Vendor Setup Complications: For certain expense types, vendor information wasn't correctly configured in the Accounting system. These seemingly small setup issues created significant holdups when processing invoices.
Poorly Timed Invoice Submissions: Invoices arriving during peak periods overwhelmed the already busy Accounts Payable department. This unfortunate timing stretched processing times well beyond the target, causing further delays in an already slow system.
With Kure's AI-powered analytics, the team quickly validated these root causes and gained confidence in their improvement direction.
The Solutions
Armed with clear insights, the team developed two game-changing strategies:
Strategic Invoice Scheduling: Working hand-in-hand with the Accounting Department, they mapped out optimal times for invoice submission. This smart scheduling approach aligned perfectly with departmental workflows, dramatically cutting processing delays.
Proactive Verification System: Staff now perform quick pre-submission checks to ensure vendors are properly set up in the SAP system. This simple but powerful preventive measure eliminates common processing roadblocks before they can cause problems.
Kure's AI-driven workflow guided the team through solution development, offering guidance and examples that accelerated their progress significantly.
The Results
The impact of these improvements was nothing short of transformative! Payment processing time plummeted from 56 days to just 3 days—a spectacular 95% reduction that exceeded everyone's expectations.
Vendors now receive payments promptly, dramatically improving relationships and building newfound trust between the agency and its business partners. The streamlined system also enhances accounting accuracy, ensuring financial records remain precise and reliable.
Conclusion
The faster vendor payment project showcases how targeted improvement efforts backed by powerful AI support can deliver remarkable, measurable benefits. By embracing Kure's AI-powered process improvement platform, the team accessed intelligent guidance that accelerated their project timeline threefold compared to traditional methods.
With this impressive success under their belt, the agency isn't just enjoying better vendor relationships and more efficient financial operations—they're positioned for continued excellence in the future. The project established a robust foundation for ongoing improvement, ensuring the organization remains nimble and responsive in the constantly evolving government landscape.
Most importantly, the team accomplished in weeks what might have taken months using conventional approaches, demonstrating how Kure's AI-powered methodology delivers faster, more substantial results while building valuable process improvement skills within the organization.
*We value our clients’ confidentiality. While we’ve changed their names, the results are real.
