Case Study 3 | Crane Company

Les Haswell was asked by an SME which designed, manufactured, and maintained cranes to investigate and improve on the process by which they prepared customer invoices.

The company’s CEO calculated that incorrect invoices were costing the company, which had an annual turnover of over £5million, in excess of £100,000 per annum. Each division of the company had responsibility for the preparation of its own invoices.

Les Haswell worked with the management team during a series of half-day sessions, to map the process by which client invoices were prepared. It soon became clear that rather than improve on an existing process, it was necessary to put a system in place, because as the MD said, “we have no system”.

Each division used a different method to prepare its invoices, some started each month from scratch while one division did a “cut and paste” from the previous month. By designing and mapping a process agreed between the divisional managers and the companies accounts department, A simple process was devised and an implementation plan agreed, including changes to the IT systems to allow easier access for divisional managers.

During the discussions, it was discovered that in an effort to issue invoices before a set deadline, the managers did not include taxi fares in the client invoices, as they did not come in from the taxi company in time. The attitude of the managers being that it was not worth holding back a £100,000 invoice for a £20 taxi invoice.

The MD informed the group that “£20 taxi fares” actually cost the company over £3,200 per month. Les Haswell helped the group to calculate that to make up for this spend not being recouped, the company needed to earn an extra £30,000 every month.

The MD said that he would introduce a system in conjunction with the taxi operator, to issue an advice note at the time of the journey, which could then be added to the client invoice.