Maestro Technologies - Intelligent management software for the construction industry.

Simplifying the validation of our business processes

Simplicity should be sought in everything. One good way for a company to achieve this objective is by optimizing business processes. From start to finish, information should flow from one step to the next, to its final location in our financial statements. In a continuous cycle, thousands of pieces of information are captured at various entry points, progressing from one status to another, or from one transaction type to another.

The challenge with this amount of data is to ensure the accuracy and quality of the information. All entrepreneurs should be concerned about not paying suppliers too much, paying employees adequately and not forgetting to invoice customers. This is a necessity because it can affect the survival of the company.

This continuous process is complicated when information is transferred from one tool to another or from one system to another. Over the years, many companies have equipped themselves with computer tools and manual procedures for processing mass amounts of information. This results in complex processes that are handled by many people without a guarantee of the final result. To prevent errors, we add manual validation steps that are also prone to error.

One of the objectives of implementing an enterprise resource planning system (ERP) is optimizing the management of the company’s operational and financial information while integrating all operations. Unfortunately, many companies stop the implementation process along the way, often being satisfied with handling the financial aspect. Yet, by integrating all of the information to ensure that it goes through the established business processes, the company could be sure of the quality of its processes using a few simple validations.

The first would be payroll. Of course, you can expect that your employees check the quality of your payroll process themselves. If there are missing hours, unpaid overtime or related expenses, they will let you know very quickly. The information used to produce the company’s payroll should be from your operations, not only a time sheet provided to the payroll department. Since the hours and other expenses come from operations, they can be used to monitor project costs and protect you from budget overruns. They can also be used to prepare invoices, particularly for service companies. In the event of unpaid hours or expenses, the chain of operations can be checked to confirm the validity of a request with the assurance that what is paid to the employee will also affect other operations in the company, including invoicing if applicable.

Another validation function is bank reconciliation. You can expect your financial institution to provide accurate statements for your bank accounts. Is therefore necessary to reconcile monthly to ensure that the information in your financial system and that provided by your bank matches exactly. If there is a discrepancy, you must conduct a serious analysis and enter the correct information in your financial system. For example, if a payment is missing, it is best to follow the normal procedure for entering payables and apply a payment rather than blindly creating an accounting entry. The same principle applies to bank charges and income.

Like your employees, your suppliers will remind you that vendor invoices are due, but you will not necessarily be informed if you have paid too much. To prevent this type of situation, it is important to set up a controlled procedure for purchasing products and services. Matching invoices with orders and implementing a procedure for approving orders is enough to ensure that no unauthorized invoices are paid.

To conclude, a good control panel with some well targeted measurement metrics of your business activities and procedures should detect any irregularities. The recommended approach is usually to use a normal target with a reasonable positive and negative discrepancy. Any values outside of these targets would automatically trigger search and validation procedures.

The vision that underlies this simplified control procedure is as follows: carefully identify the various information entry points, define the route the information will take for the various activities of the company, and carefully identify the control points that provide assurance of proper operation.

Robert Meunier

Send a comment