Tough Times Call For Working Smarter

From the April/May 2009 Issue

How would you or your client like to place this ad in the Employment Section of your local newspaper?

Help Not Wanted:
Our accounting department doesn’t need another person to keep up with the Excel spreadsheets or do data entry. We’ve been paying $40k for this job, but now we have a system that is so efficient at handling our processes that we eliminated a position. Do not send your resume.

ALL SYSTEMS GO FOR A RESTAURANT GROUP
A restaurant group with 25+ locations said they eliminated just such a position when their new business management system got up and running. It wasn’t part of their plan, but it was a direct result of eliminating so much manual work that there was no need for the position. That type of help was no longer needed.

For the restaurant group, the system came first and then the reduction in workforce. That’s not the picture we see in companies where the economic downturn has resulted in a drop in sales and the inevitable layoffs that follow. The work must still be done. Some businesses will just pile more on the folks still there, but forward-thinking companies will see this as an opportunity to fine tune their processes and look at upgrading, replacing and revamping their internal business systems.

THE WAKE UP CALL FOR A ROOFING SUPPLIER
Consider the roofing supplier who never had an inventory system he trusted so he relied on Bob, the warehouse foreman. Everything they needed to know about inventory was in Bob’s head. When he walked through the warehouse and saw he was low on something, that was when he ordered. That got them by in the good times, but Bob was on the layoff list when the slump in the housing market took its toll. That was a wake up call when the owners realized they really had no clue of what was in stock, what was a big seller or which clients bought what.

The answer was clear: They needed to get a handle on their inventory, and it had to be a system in which they could have a high level of confidence. As it turned out, the investment in an integrated business management system with inventory control was less than it cost to keep Bob on the payroll for another year. It also automated their knowledge, which made them much less vulnerable to the comings and goings of employees. The unexpected side benefit to them was much improved customer service because they knew immediately what was in stock. Now they use the system to forecast needs, which has also reduced their inventory carrying costs and improved the bottom line.

Strong internal systems will always help a business do more with less, but it doesn’t always have to be based on technology. An improved system can be just good old attention to detail and old fashion analysis.

INVESTIGATIVE ACCOUNTANT STRIKES GOLD FOR A HEALTH CARE PROVIDER
Consider the case of the health care provider who really wanted to keep all their people during what they hoped was a temporary drop in business. They encouraged their team to use their downtime to look hard at all the many aspects of their business and see what efficiencies or savings they could identify. An enterprising accountant decided to pull out the files filled with the thick phone bills that come each month and do an analysis at a level that had probably never been done. Bingo!

On the company bill they identified an extra phone line they had been paying for that was no longer needed. On the cell phone bill, they discovered monthly charges for a GPS add-on that enabled users to find local restaurants or businesses when they were traveling. That was fine if they needed it, but many of their employees did not. Turns out the cell phone company added it on to all new phones as a free trial for a month and nobody ever bothered to stop it after the 30 days had elapsed. Yes, you do need to go check your cell phone bill.