Divide and Consolidate.

Accounting system works for managed care organization and affiliates.

Accuracy and efficiency are hard standards to maintain in a single organization or facility. Couple them with consistency across 15 separate but related organizations, and these standards look more arduous from any perspective.

PROBLEM

Hope Network, a 15-affiliate managed service organization in Grand Rapids, MI, serving people with disabilities throughout Michigan, needed to consolidate its accounting systems. The network's management service organization, which provides accounting services to seven affiliates, used an AS/400-based accounting system while other affiliates used a variety of DOS and Windows-based packages.

As a result, seeking management information throughout the organization was largely a manual process and meant that nearly all communications between the affiliates required shuffling large numbers of paper documents. It took a considerable amount of time to consolidate financial results of the various affiliates, which made month-end closing reports time-consuming. Finally, training represented a burden for the organization because of the use of multiple, mostly non-graphical systems. We wanted to get more accurate and timely information and reduce paper shuffling.

SOLUTION

In early 1998, we formed a team to redesign our business processes and systems that included financial and information technology staff members, as well as representatives from the various affiliates.

Our accounting firm recommended several leading mid-market accounting packages, and management asked local value-added resellers to demonstrate these packages. Team members reduced the selection to two packages and chose Solomon IV version 4, from Solomon Software of Findlay, OH, because they believed its user interface was easier to use and it was easier to customize screens and reports. The team also chose value-added reseller EHTC of Grand Rapids, MI, to assist with the implementation process.

The software, which includes general ledger, accounts payable, accounts receivable and customization manager, was installed on a Compaq server with Pentium II processor and RAID array.

We started the implementation in April 1998 and completed it in May 2000. The team developed operating practices, accounting conventions and an implementation plan, and secured buy-in from the entire organization. We found we needed to make only minor customization to the accounting system, including some redesign of screens and report designs to match the organization's operations.

The import function of the software proved that it could read information from the AS/400 database. We made the decision to run many of the affiliates from different databases because they have different fiscal years and some include non-profit housing corporations with special reporting requirements.

The powerful multicompany capabilities offered by the software provide the flexibility to let subsidiaries adjust to local conditions while providing powerful centralized reporting and cash-management features. Once these steps had been accomplished, we ran a dual test at one of the smaller affiliates to gain experience with the system. After this test was successfully completed we rolled out the new system organization-wide.

RESULTS

With most of our affiliates now live on the new system, we had already seen substantial improvements.

Probably the biggest advantage is that we will have unified our entire organization under a single accounting system. This is dramatically improving communications between the different affiliates, giving management the ability to obtain real-time operating information and greatly reducing the amount of paper that needs to be passed between the various affiliates.

By standardizing the accounting system, each affiliate has the ability to do its own accounting using its own business practices while simplifying the consolidation process. For example, the fiscal calendar can be different for each company. Each company can have its own unique chart of accounts, as long as those accounts follow the organization's master of main account structure. Each company can close its books independently of the other companies, and can maintain separate customer and vendor lists, yet a high level of integration is maintained between the individual affiliates.

Affiliate users can also take advantage of simplified tools to customize screens and generate their own reports.

With our old AS/400 system, we had to call in a programmer to make even the simplest changes. Now, an administrative person can make changes on the fly. Users can generate an income statement for a single cost center or produce a vendor ledger in the blink of an eye. They also now have the ability to drill down into reports to the individual transactions in seconds.

Another advantage of the new accounting system is the fact that it's so fast. Month-end processing tasks that used to take hours now finish in minutes. While it used to take at least 15 days to close on the AS/400, the first affiliate to implement the system is able to close within 10 days and we expect that the others will reach or exceed that level in the near future. We expect to see significant productivity improvements at each of the affiliates as they move up the learning curve and even greater improvements at headquarters because the previously difficult consolidation process has been nearly completely automated.

The implementation is an overwhelming success. Everyone in the firm, from the individual users to top management, is enthusiastic about the improved productivity and information flow that Solomon IV Version 4 has delivered. Management is moving forward to conclude companywide implementation with confidence.

For more information from Solomon Software, circle 193

SOURCE

Jonell Williams System Technician Hope Network Grand Rapids, MI 616-248-5229 [e-mail]

PRODUCT/COMPANY

Solomon IV Version 4 Solomon Software www.solomon.com