PDCA cycle: Paying supplier invoices
Cycle 1 of 1
P Plan
- Problem
- Supplier invoices are paid late: suppliers ring us, and we miss out on early-payment discounts.
- Goal and expectation
- Lead time from receipt to payment goes from an average of 30 to 14 days, within 8 weeks.
- How we measure it
- Weekly average lead time from the accounting system, across all invoices of that week.
D Do
- Carried out
- Invoices are booked digitally straight on receipt. One fixed colleague per department approves, with a reminder after 3 days.
- When and by whom
- From 1 March, the Finance team, together with the three heads of department.
C Check
- Result
- After 8 weeks the average lead time is 12 days. However, 1 in 6 invoices still contains an error that needs manual work.
- Did the hypothesis hold
- Yes, it held
A Act
- Decision
- New cycle
- Into the next cycle
- Lead time is secured in the work instruction. The errors in invoices are the problem for the next cycle.
Made with the PDCA tool by Lean Six Sigma Groep, leansixsigmagroep.nl/en/tools/pdca/