Top
HomeResourcesThe True Cost of Manual Processes

The True Cost of Manual Processes

As a Human Services agency, you’re constantly tasked with “doing more with less.” With tight budgets and even tighter restrictions on how you spend funder dollars, making sure your organization is running as efficiently as possible is a must. In our experience though, most human services organizations are so busy focusing on service delivery and putting out fires that they have little time left to focus on internally-strategic things such as determining the average cost of many of their day to day processes or figuring out more efficient ways to manage these tasks. And, because funding is tight, purchasing a new management system that could automate many of these processes seems too costly so many agencies continue to rely on paper-based or manual methods.

But what is the true cost of completing tasks manually? While the 3-4 minutes it may take to do something simple like walking over a purchase request to a supervisor’s desk for approval may seem insignificant, if you have to do it a couple times a week, and then multiply that by a year, you’d be shocked by how much time you’ll have spent walking back and forth between desks just to do this one minor task. But obtaining approvals isn’t the only offender when it comes to surprisingly-costly manual processes. Some other tasks that add up to significant time and costs wasted are Expense Claims, Purchasing and Inventory Management, Timesheets/Payroll, and Employee Scheduling.

Skeptical about how much these tasks, when completed manually, are actually costing your organization each year? We’re here to tell you – it’s a lot. We’ll break it down by the 4 main offenders to offer just a glimpse at how much time and effort your organization could be saving every year simply by saying Goodbye to your manual methods and Hello to an integrated system that manages all of these tasks seamlessly through automated processes.

EMPLOYEE EXPENSE CLAIMS

According to a recent PwC survey, 89% of finance departments face challenges in their expense claims process. Typically this process includes employees having to manually enter purchase information into a system, printing out the completed claim document, printing and attaching paper receipts, dropping their claim off at the finance department who then has to verify the purchases and receipts, pass it back to that employee’s supervisor for approval, wait for the supervisor to sign, approve and return the claim, and then manually calculate and input the information in their system so the employee is paid the amount on the claim. It’s a slow and clumsy process that is prone to error, and worse, getting lost in other piles of paper on people’s desks. One Sparkrock client, Rainy River District School Board, struggled for years with this process, fighting an uphill battle every month as employees submitted claims. Not only was the process tedious, but it also gave them low visibility into what was being spent against budgets and opened up the risk of unapproved expenses being reimbursed.

Since switching to their Sparkrock solution and taking advantage of our Online Expense Claims module, they’re now able to reduce expense claim processing time by 80%. Yep, that’s right, 80%. By automating credit card transaction uploads, being able to digitally submit images of receipts and send them to Finance with statement data, using automated workflows to send and alert supervisors of claims that need approval, and direct integration with payroll – they estimate that their finance staff are saving over 4 days of work per month processing expense claims. That shakes out to 48 days a year of time that can now be put towards more strategic and meaningful work!

PURCHASING AND INVENTORY MANAGEMENT

Purchasing and Inventory Management is another process that is typically accomplished manually, taking up a lot of time and creating many opportunities for human error. Many organizations even have staff whose sole responsibility is to manage their purchasing and procurement processes. For Grey Bruce Health Unit, this process used to involve an employee completing a purchase requisition for whatever supplies they may need and then sending the request to their supervisor for approval. Once the requisition was approved, it’d be sent to a Purchaser who either went out to shop for it, purchased it online, or pulled it from inventory and updated the counts manually. What’s worse, their process for tracking inventory was to record the inventory consumed on a sheet of paper that was located in the supplies closet. As you can imagine, this was an extremely inefficient process, prone to human error, and an absolute nightmare to reconcile should their organization ever be audited.

Now Grey Bruce Health Unit uses their Sparkrock solution to automate most of this process. When a purchase requisition is created in the system, it is automatically routed for approvals through established workflows and is validated against budget thresholds and commitments before being approved. If approved, inventory counts are automatically updated in the system, and automated purchase orders are sent out to preferred vendors when inventory counts go below certain levels. Since implementing their solution, Grey Bruce Health Unit estimates that they’re able to save the cost of ½ of a full-time staff member annually just from taking the manual effort out of their inventory and purchasing process.

TIMESHEETS AND PAYROLL

In-house administration of payroll and timesheets requires a surprisingly large commitment of time and resources. Before implementing their Sparkrock solution, Action Group struggled to manage the data and process silos that had popped up between their Finance and Human Resources departments. Information was stored either manually or in different systems, causing staff endless hours of work piecing the information together for a successful payroll process. Compounding this challenge was the management of timesheets. For starters, the process was manual, which meant they were processing over 600 timesheets by hand every two-weeks. The complexity of the timesheets was huge, and there was no efficient way to cross-reference information to get a complete view of their employees’ time worked or schedules. Sometimes they’d have to spread all the timesheets across a table to determine if people were going overtime, and then all of this data had to be manually coded and keyed into their finance and payroll system. To add salt to the wound – because some of their timesheets were handwritten, they couldn’t be easily read and then had to be verbally clarified with staff.

With their Sparkrock solution, Action Group’s timesheet process is now automated and can be completed in a fraction of the time by taking scheduling information from within their system and integrating it directly into their payroll. All they have to do is build their schedule template within the system, staff then enter the shifts they worked, supervisors confirm the information is correct, and then this information is automatically processed into payroll and tracked within their finance system. Not only does this give employees more ownership and accountability over their payroll info, but payroll staff no longer have to spend hours doing tedious timesheet data entry. This has reduced the need for 1.5 full-time employees, and they’ve now been able to reallocate these resources from data entry into more strategic roles.

EMPLOYEE SCHEDULING

Scheduling employees, including finding replacement staff when someone is unavailable to work their scheduled shift, is the area that offers the most substantial amount of time and effort saved by moving off of manual processes. For many human services agencies, scheduling is completed manually by a Master Scheduler and then the completed schedule is posted on a bulletin board in their workplace, forcing employees to physically come in to view their schedule. If employees then want to make changes to the schedule, they’d simply cross out and write new information in – opening them up to errors and conflicting information. As well, if someone couldn’t make it for a shift it was extremely time-consuming to find a replacement. The supervisor would have to pick up the phone and call around to ask other staff if they would take the shift. This leads many organizations to often rely on internal staff who quickly become overworked and have to be paid overtime.

With an integrated, online scheduling tool, organizations can modernize their scheduling process to maximize operational productivity and meet all regulatory requirements while avoiding scheduling and payroll conflicts. The Robin Hood Association is a great example of an organization that has radically reduced the amount of time it takes them to do their employee scheduling and payroll. Their staff are able to indicate their availability online, and then the Scheduler uses this data, along with information pertaining to skills, seniority and certifications, to make informed scheduling decisions. The schedules are then posted online for all staff to access, and they can then easily request shift changes or trades, or bid for open shifts. These change requests are automatically sent to the supervisor to approve or decline and are then updated within the system. The system also has built-in warnings if staff are scheduled for shifts that cause them to move into overtime hours, helping to drastically reduce the amount of money spent on overtime. As well, because their scheduling and payroll modules are integrated, supervisors can view staff’s timesheets online, verify that everything is correct, and then Payroll just has to hit a button and the money goes to the bank. Overall, Robin Hood Association estimates that by removing manual steps from their scheduling and payroll processes, they’ve reduced the time it takes to complete these tasks by at least 75%.


So let’s look back and recount all of the potential time and costs savings that can be had simply by eliminating manual processes and allowing an integrated finance and workforce management solution to handle these tasks:

  • Employee expense claim processing can be reduced by 80%
  • Save the cost of ½ of a full-time staff member annually just from taking the manual effort out of inventory and purchasing processes
  • Automate timesheet and payroll processing to reduce the need for 1.5 full-time employees that can then be reallocated from data entry into more strategic roles
  • The time it takes to create and manage employee schedules can be reduced by 75%, and the problem of paying for costly overtime hours can all but be eliminated due to automated warnings

If purchasing a robust finance and workforce management solution seems too costly for your organization, make sure you’re stepping back to look at the full picture. While manual processes may seem like the cheaper option on the surface, if you add up all of the extra time it takes to complete these tedious tasks, in the end you’re likely going to end up spending more than you would on a new system (and experience more stress in the workplace as well!). By allowing workflow automations and integrated solutions to take the “busy work” out of your processes, not only will you save considerable time and money that can then be reallocated into your programs, but you’ll experience happier staff. And who doesn’t want happy staff?

 

Subscribe to the Sparkrock Blog

Get regular updates and insights from Sparkrock, including the latest trends and best practices for nonprofits, educational institutions, and other social impact organizations.