DOD Contract Manufacturer
“Company A” is a leading provider of sophisticated electronic components, instruments and communications products, aerospace engines/components, and on-site gas and power generation systems. SSG worked with a division (Division A) of the company that is a global leader in the design and manufacture of infrared (IR) sensors, serving the surveillance, law enforcement/security, laser beam diagnostics/range-finding, chemical and biological detection and spectroscopy markets.
Division A outgrew the capabilities of MK running under Unix/BISAM. While it had basic internal software and system support, there were little or no software development capabilities within the organization. The MK system required a major upgrade to Windows/SQL in order to keep up with company growth and related system demands.
The physical system was moved across the country from Pennsylvania to California. Responsibility for the finance function was relocated as well, making a new group of people in California responsible for financial reporting. In addition, there was attrition in the Accounting department which, along with the general challenges associated with relocating the system, led to down-time, reduced productivity, and the requirement for increased I/T resources.
When Company A purchased the new division, the ERP applications of the two companies were from different vendors. The challenge was to support the MK ERP application at the division while the parent company operated Deltek Costpoint.
Because of the acquisition, there was a requirement for systems and application training, including the financial modules in the ERP application. This situation became more challenging as a result of attrition. The loss of accounting personnel necessitated the hiring and training of new team members.
The functioning of the MK application was not optimal for the division’s operations and financial reporting due to financial mapping errors, inaccurate month-end balances, and incomplete procedures. Because of these issues, Accounting needed to book manual adjustments to the General Ledger in order to put affected balances back in sync with the sub-ledger reporting.
Additional accounting-related challenges included: The inadvertent creation of uninvoiced receipts discrepancies; procedural errors in the receiving and Accounts Payable entry processes; problems matching supplier invoices to purchase order receipts and approving purchase invoices; invalid Accounts Receivable invoices for large dollar amounts; issues related to the reconciliation of inventory and project WIP sub-ledgers with the General Ledger. As a result, month-end closings could not be completed in timely manner creating undue stress within the Accounting department.
Finally, Division A was unable to easily track the costs associated with large projects. It was a manual, labor-intensive, and time-consuming process. Because of the requirements associated with US government programs, accurate actual costs are essential to the program managers. The division was having difficulties in easily identifying and tracking costs by project / program.
The SSG Solutions
SSG improved Division A’s business processes and capabilities through software development, comprehensive training, and technical support services.
SSG’s software development capabilities were used to:
- Manage and eventually resolve uninvoiced receipts discrepancies;
- Identify the sub-ledger / General Ledger mismatches at a granular level (e.g., customer, supplier, item, cost component, etc.);
- Implement SSGBusIntell, a data warehouse that allowed Division A to do its own reporting and analysis with little or no I/T support;
- Implement the Project Accounting module in MK. This allowed Division A to track and report financial costs by project.
SSG also provided training in the following areas to increase productivity and self-sufficiency:
- Project accounting;
- Accounts Payable processing, including matching to purchase order receipts;
- Financial mapping, including stock and WIP, sales invoice, and Accounts Payable, allowing financial data to flow properly to the General Ledger;
- Cost rollup and updating standard costs.
SSG provided the following technical support services to support business processes:
- MK Migration from Unix/BISAM to Windows/SQL;
- Operating system and MK version upgrade;
- Software bug identification, analysis, and correction;
- Inventory control issues, including bug fixes and patches;
- End-of-month on-call support services.
SSG assisted with the upgrade to the current version of the MK ERP application and database to improve system performance and functionality.
With SSG’s assistance, Division A was able to significantly improve its financial visibility and substantially reduced the number and magnitude of accounting adjustments. In addition, month-end processing time was reduced by approximately one day.
The SSGBusIntell data warehouse streamlined operational and financial reporting, facilitating data-driven decision-making. As a result, Division A was able to reconcile the Accounts Payable, uninvoiced receipts, inventory, and project WIP sub-ledgers to the General Ledger with minimal effort.
Financial activity by project could now be captured accurately. This enhanced sales order, purchase order, and production order visibility and allowed revenue and cost of sales analysis by project. The primary benefit is the ability to generate profitability reporting for each project separately. The result is more useful information for the program managers to quote future projects.
Finally, SSG’s system consulting and custom software development allowed Division A to utilize its ERP application for an extended length of time, deferring an expensive migration to a replacement ERP application.
For more information about how SSG can help your organization, please contact SSG at (310) 539-4645 or via the contact form today!