Remember the movie, Fried Green Tomatoes? “The secret’s all in the sauce.” I would argue that the secret’s all in the numbers when it comes to running a business. If you have not taken a look at updating that old accounting system, you could be missing out on opportunities to improve your business. It is one of the first places I would look to “remodel” if you need to transform your business… find cost savings or increase sales.
In 2013, it became quite clear that Onex was in need of a new accounting system. We would jokingly say we were being “whipped by WIP.” One month we had high invoicing and no profit and the next we had low invoicing and a profit. None of the numbers made sense. You know the saying, “Junk in equals junk out.”
So, being the engineer I am, I thought, “How hard can it be to implement an accounting system?” Good thing I had no clue how hard it would be or I may have never signed up to manage the project!
Sourcing: Due Diligence
I spent the summer of 2013 sourcing accounting systems. Our business is part construction, part manufacturing and part material sales so finding an accounting system to do it all well was not a real option. Due to budget constraints, we had to pick a boxed accounting system and be creative to make it work the best we could for our unique business.
Implementation: Getting Ready to Go Live
It as a labor of love to get the new company setup and all the information loaded with a go live date of January 1, 2014. The implementation process was so stressful that I literally lost my hair. But, we made the go live date and spent the next 6 months working the bugs out and figuring out our new system.
In Process: Data Backed Decisions
As we started getting numbers that we could trust, we were able to make more sound business decisions. For instance, we divested of two product lines that we were basically taping $20 bills to and shipping out the door. Before you judge too harshly, understand that the old accounting system did not have any visibility into product line accounting.
Continuous Improvement: Efficiency Gains
We used the new technology to become more efficient as well. A value stream mapping event showed us where there were processing lags in our system. Now, when an order comes in, one person processes it from start to finish. This means the client gets one point of contact and the answer they need faster.
As the years have gone by, the team has continued to become more efficient in our processes. We have stopped printing an order just to turn around and file it never to be seen again. (This process was leftover from our previous system since there was no way to retrieve historical information.) The new system has ever transaction ever made stored and ready to be pulled up with the click of a mouse or a new query.
Our new access to information also means that we can pull data that was useful to us running the business. We are able to make decisions on pricing and production quickly. We can see problems coming before they arise. We can make adjustments as needed.
And yes, after you are finished implementing the new accounting system, your hair will grow back. In fact, you may stop pulling your hair out because you are able to make business decisions based on data.
Have you really dug into the numbers lately to see how your business is performing?