Accounting Best Practices, Fifth Edition

13–5. Implement Process-Centering

A major problem at many companies is the inordinate amount of time it takes to complete a process. For example, insurance companies are famous for spending many weeks to review an insurance claim and issue a payment check, when the total amount of work required is under an hour. The long time period from the beginning to the end of the process is usually due to the number of transfers between employees. For example, the insurance branch office may forward a claim to an insurance adjuster, who passes it along to a manager if the amount exceeds a set level, or who hands it off to another person who checks to see if the claim may be fraudulent or if the claimant has an unusually long history of claims, then moves the paperwork to another person who issues checks, and then returns the entire packet to the insurance branch office. Insurance is just an example—upon further investigation, it is common to find that all companies invest a shocking amount of time in moving paperwork between a multitude of employees. A related problem is that transactions can be lost when they are moved between employees. Further, it is difficult to pin blame on anyone when a transaction is improperly completed because there are so many people involved in the process. Thus, spreading work among too many people opens a virtual Pandora’s box of troubles.

The solution is called process-centering. Its underlying principle is to cluster as many work tasks for a single process ...