I have recently been working with the Kentucky Community and Technical College System (KCTCS) on improvements to their Procure-to-Pay process. These improvements include streamlining their procurement process and improve efficiencies. With the upgrade to PeopleSoft Financials 9.1, we were able to streamline the year-end processing, especially the year-end accruals for both purchasing and payables.
Old Processing Issues
The old procedure for processing the accruals at the end of the fiscal year was very labor intensive. It involved a great deal of manual effort by both the central offices and the colleges.
A report had been created for purchasing-related accruals, utilizing Connected Query and BI Publisher, to identify all the open purchase orders with their receiving and invoice information. The report included outstanding balances. These reports were distributed to the buyers responsible for the college and to the college. The buyers and the colleges worked together to determine what to accrue based on the report. This was very time consuming on everyone’s part.
For those accruals not related to purchasing, such as utility charges and travel expenses not yet submitted, the Payables Director provided a template to each of the business units. The colleges were responsible for identifying and populating the spreadsheet with the accruals. Once the colleges completed the spreadsheet, the information was returned to the Payables Director for compilation.
Both the Purchasing and Payables accruals were provided to the Accounting staff for uploading and posting of the journals to the General Ledger. The Accounting staff reviewed the information and, after loading, worked with the colleges if there were any errors encountered during the edit and post process.
As you can see, there was a lot of manual effort involved in the gathering and processing of the accruals. This caused problems with the accuracy of the accruals and didn’t take advantage of the automated processes delivered with the system.
New Processing Efficiencies
With the upgrade to PeopleSoft Financials 9.1 at KCTCS, it was decided to take advantage of the many delivered processes provided for year-end procurement processing. Some of the processes implemented were new to PeopleSoft Financials 9.1, while others were delivered in previous releases but were not yet being utilized at KCTCS.
Now, instead of manually gathering the PO related accruals, the delivered Receipt Accrual process is being run to gather this information automatically. The colleges were already entering the receipts into the system so this didn’t add to their work efforts. As for the non-PO related accruals, we decided to have the colleges enter non-PO receipts for these accruals. The only change here was that the college was now entering the information into the system instead of keying it into the spreadsheet. These non-PO receipts were later used to create the voucher, thus eliminating the information from having to be keyed into the system twice.
Along with the accruals, the PO Rollover process was implemented to roll over purchase orders instead of manually updating them.
The three biggest challenges that we faced with this project were (1) determining the overall configuration requirements, (2) determining who was responsible for what, and (3) determining how to communicate and train the colleges. We started by determining the changes needed to the existing configuration to support the implementation of the three new processes (Receipt Accrual, Payables Accrual, and PO Rollover). Each process required review to determine set up changes, access requirements, and processing requirements. This involved discussions with Purchasing, Payables, and General Ledger folks. It had a major impact on the year-end closing calendar for everyone.
We spent a lot of time working on the configuration requirements and business procedures. All of these things were documented thoroughly.
Once the key decisions were made, they had to be communicated to the colleges. We started by presenting an overview of the process to the business offices for the colleges at their annual meeting at the Systems Office. In addition, emails were sent out well ahead of time informing the users of the upcoming changes and training schedules. This allowed for planning by the colleges in advance of the training. We delivered the training regionally for the colleges. We asked several of the colleges to host these training sessions in their computer labs. We used UPK to create the training documents. All the training documentation was then placed on the web for the users to access after the go-live.
Working with KCTCS staff on this project – especially Kim Freeman, Director of Accounts Payable, Doug Allen, Director of Accounting, and Brenda Nolan, Associate Director of Purchasing – has been a great experience.
Interested in learning more?
I will be co-presenting a session at Alliance 2014 with Wendell Followell (Business Services, Director at KCTCS) and Brenda Nolan (Purchasing, Associate Director at KCTCS) titled “Simplifying Your Procurement Year-End” (Session #33048) on Tuesday, March 11, 3:00 p.m. to 4:00 p.m.