Streamlining internal controls for a large multi-location not-for-profit organisation: a case study with Kendons
How Kendons used ApprovalMax to increase speed efficiency of the accounts payable process in a New Zealand charity organisation
Kendons Chartered Accountants is a locally owned accounting firm based in Lower Hutt, New Zealand. With more than 80 years in business they specialise in accounting and tax as well as advisory, particularly around IT implementations.
Understanding the needs of not-for-profits
Kendons serve a number of not-for-profit clients, both large and small, and experience shows that efficiency is the core need here as time is even more precious to organisations with limited resources. Consequently, implementing a cloud app stack featuring Xero, ApprovalMax and Futrli or Spotlight Reporting has a huge positive impact. Time savings reduce costs and allow clients to use available skills elsewhere in the business, which also keeps costs down.
In New Zealand it’s quite common for not-for-profits not to engage an accountant, either because a volunteer does this work or they’re big enough to have a finance team. Unfortunately, this often means that they lose sight of the importance of thinking ahead regarding process improvements and making better use of their finance team rather than have them chase approvers. As far as advisory goes, it’s usually the bigger charities who are interested.
How Kendons reorganised the accounts payable process and strengthened internal controls for a big charity
One of Kendons’ clients is a big charity with a centralised national office, 14 sites across New Zealand and more than 200 employees. Previously, the finance administration was performed by their national office, where all information was arriving in various formats. The finance people at service level struggled to get the relevant data for entering into the accounting system in time.
In those days, their accounts payable process was anything but efficient. The finance person at each service site used to print out all incoming invoices, stamp them and add the respective code by hand before placing them on an approver’s desk – even if they, as so often, were not actually in the office. On their return, approvers reviewed the documents, than had them scanned in and passed on to the central office finance team where they were checked once more. If the code wasn’t correct, everything had to be sent back to the service centre for yet another review and new coding. The approval process then restarted, the papers made another journey before the corrected data could at last be entered into the system and, finally, the payments got approved. This was a time-consuming, somewhat chaotic approach and a lot of invoices went missing. It really was high time to speed up this laborious process and boost efficiency.
Obviously, it made an enormous difference when Kendons reorganised the whole accounts payable process: they migrated their client to Xero and later added ApprovalMax to take care of the approvals.
Complex approval rules organised to provide a simple process
The approval process for this charity is quite complicated as it is, but they also need to observe the limitations of their budgets. If they don’t assert rigorous control, it can quickly get out of hand. ApprovalMax does a perfect job supporting such internal controls, even though it took about three days to properly set up the approval rules for this organisation. Their authorisation process has many different layers, such as approvals by regional and national managers, and there are a lot of rules to observe as well as the exceptions to these rules.
ApprovalMax resolved the problem this charity had. Now, their accounts payable procedures are done on schedule and no more time is wasted on chasing approvals or printing, stamping and passing round paper documents. Approvers, who are often out and about, can review and authorise invoices on their phone – so no more delays there either.
To top it all, the detailed approval reports ApprovalMax automatically generates make audits a breeze. The auditors are very happy with this convenient access to relevant information because their job too has now become a great deal easier and faster.