• Improved cash flow

• Reduced Accounts Receivables (AR)

• More time and investment capital to grow the business

• Increased staff satisfaction on the accounts receivables team

Step 1: What’s My Opportunity?

Clarify what optimizing the process will accomplish

The business was experiencing a steady increase in DSO for one of its biggest selling products. A process optimization team consisting of Sales and Accounts Receivable staff was formed to reverse the trend and reduce DSO.

 Kure set the project up for success by clarifying their problem and goal, then automatically created their Project Charter, Plan, and Timeline. The recent fiscal year accounts a receivable of $2.1M with a 202-day average DSO on credit terms of 60 days. The goal was to reduce the DSO by at least 30%.

Step 2: What’s My Process?

Explore the steps by which the work gets done and find opportunities

The team was guided to map out their current process, explore the process flow and collect data on its performance using Kure’s As-Is Map and Data Collection Tools. 

Kure enabled the team to establish the baseline performance and look for opportunities to reduce DSO. Kure’s AI, which includes Anomaly Detection, helped uncover several factors that could lead to improvement, like:

• The manual billing process was often delayed

• Frequent errors and disputes with invoices

• Inconsistent payment follow up

• Multiple team members following up on the same account with other accounts getting little attention

• Unclear responsibilities

Step 3: What’s Causing My Problem?

Identify one or more actionable items producing the undesired effect

Using Kure’s Fishbone Diagram and 5 Whys, the team identified several root causes of the long review process and errors:

• Dropped handoffs between sales and the Accounts Receivable team regarding follow-up

• Delays in submission of documents to Accounts Receivable and Finance

• Unclear ownership for Accounts Receivable

Step 4: What’s My Solution?

Implement specific solutions to make the problem go away

Focusing on the root causes, the team generated, evaluated, and implemented the best solutions using Kure’s Solution Selection Matrix which helped them visualize their options.

• Improved communication of customer’s payment responsibilities

• Provide early pay incentives and late fee penalties

• Escalation matrix with standard instructions, checklist, and responsibilities for follow up

• Automated the manual billing process

• Improved system tools for credit team updating of payment status

• Regular notifications to staff regarding the status of all outstanding payments

• Sales Manager directly responsible for any payments above $50k

• Regular meetings to review Accounts Receivable calls and status

The quarter after implementing these solutions, the DSO was reduced to a 110-day average (45% Improvement) with an Accounts Receivable balance of $1.4M.

Kure automatically generates this documentation alongside a Project Summary so the project team could easily communicate and celebrate their success — helping them efficiently transfer and scale their success throughout other operations.