Rebuilding Trust in Finance

Executive Summary

Industry: Healthcare
Sub-Sector: Medical Equipment
Annual Revenue: $3B+

A mid-market home medical equipment company experienced several mergers over a multi-year period, significantly expanding its supplier base and increasing operational complexity. Waypoint Business Advisory was engaged to address supplier spend control gaps in order to improve financial reporting accuracy and reduce invoice processing cycle time. Total spend control increased by 40% while average invoice cycle time reduced by 85%

Full service HME client experienced a rapid 5-year growth through acquisitions period, significantly expanding its supplier base and operational complexity. The company's Accounts Payable (AP) function was responsible for processing invoices that often required specific instructions to ensure accurate expense recognition and timely payment

However, 55% of direct & indirect spend lacked adequate control.

Situation

Complication

A lack of specific supplier instructions and inadequate purchase order coverage led to inconsistencies in expense coding, resulting in high volume of manual JEs, slowed invoice processing times, and an increased risk of late or incorrect payments

These complications raised concerns around the reliability and control of margin accuracy along with month-end, quarter-end, and year-end reporting integrity, eroding confidence in AP operations and putting pressure on the CFO

Resolution

Waypoint analyzed ~$1B in spend, targeting the top 300 suppliers with emphasis on repeated problem suppliers (by function) with input from client leadership. To resolve the client's challenges, a focused plan was executed to standardize procedures, improve automation, and drive measurable results:

• Built ~450 supplier-specific invoice processing desktop procedures

• Leveraged low-touch Oracle automation to increase cycle time

• Trained AP clerks on new procedures

• Partnered with Procurement to move suppliers to purchase orders

• Created weekly reporting and analytics to measure new procedure effectiveness

Outcomes

Soft Benefits

• Quickly rebuilt Finance "as a trusted partner" by working directly with back-office leadership for input on priortization

• Increased CFO's confidence in AP operations and margin accuracy while reducing invoice escalations

• Reduced SOX compliance risk with added controls to ensure accuracy of financial reporting

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