Metrics – Finance, August 2016

Created to improve operations at SMU and identify savings in administrative costs to reallocate to academic purposes, the Office of Operational Excellence has identified key measurements to track progress towards its mission. At the beginning of the Operational Excellence for the Second Century (OE2C) project, research revealed that our peers across aspirational universities are spending a greater percentage of funds on the academic mission versus administration costs.

To measure SMU’s progress toward achieving a competitive balance of academic and administrative spending through bold initiatives that serve the staff, faculty, and students, the Office of Operational Excellence has identified a set of key metrics.

Below, you’ll find key metrics from Finance including the following Q&A with team leaders.

Why were these particular performance metrics chosen to represent progress toward operational excellence in your area?

Overall we felt these metrics best represented areas that would give us guidance to improve the operations of the area, e.g., we wanted to analyze the time between an invoice date and the date of payment in order to identify opportunities to increase vendor satisfaction by processing payments within payment terms.   

How do these metrics support the work of your OE2C initiative?

The data suggests that a delay in payments is primarily the result of invoices not being submitted to us quickly enough to allow for timely payment or utilization of vendor discounts.  We will use that information to explore options for receiving invoices centrally.

Looking at your performance measures, what findings are most interesting or compelling to you?

The delay in payments to vendors is primarily due to the time it takes an approved invoice to be sent to Accounts Payable (A/P) for processing and payment.  The time for processing approved invoices received by A/P has been less than 10 days, which is the Service Level Agreement (SLA) established for the prior year.

What are your main areas of focus going forward?

We want to identify a streamlined process to centrally receive invoices and implement an electronic solution for approval and upload into the A/P system.  We also have implemented a new SLA of processing approved invoices within 5 days of receipt by A/P.  We are working with the Facilities team to implement an electronic upload of invoices via the e-Builder system, which will result in more efficient processing.

The Finance Institutional Metrics Dashboard

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  • Goal: To reduce the number of days between invoice date and receipt of invoice in A/P.

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  • Goal: To reduce the number of days between receipt of invoice in A/P and date invoice entered into system.

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  • Goal: To reduce the number of days between invoice entered in A/P and payment date.

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  • Goal: To reduce the number of days between invoice date and payment date.

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  • Calculation is based on all regular vouchers greater than $3,000 and grants greater than $5,000.
  • As more and more vouchers have corresponding purchase orders, efficiency will rise due to the fact that incoming invoices will be processed without spending valuable time figuring out who ordered the products or services, obtaining approval and account coding.
  • Goal: To increase the percentage of vouchers with purchase orders.

 

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  • Journal entry capability was removed from users in various phases, which did not occur at regular intervals. Therefore, the dates above do not follow a particular pattern.
  • Goal: To reduce the number of manual journal entries and to increase controls and data input accuracy and consistency.

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  • Fiscal year-to-year comparison.
  • Since the elimination of cross charges, there has been a reduction of several thousand JE lines over last year. Finance estimates that there will be several thousand more JE lines that will be eliminated beginning in June 2016, when Facilities reduces volume from their department.
  • The spike that occurs in May of each year is due to fiscal year end journal entries.
  • Goal: To reduce the number of manual journal entries processed.

See more metrics in the coming weeks on our website or by subscribing to Operational Excellence’s email digest.

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