Case study No. 5: Hotel Chain saves undisclosed amount in indirect costs and staff reductions.

Major hotel chain based in UK and Ireland

The Client

The client runs a number of hotels across the UK and Ireland, each with responsibility for their own chart of accounts. Each hotel in the chain had a number of permanent staff members and a number of part time or contract staff who had the ability to purchase on behalf of the hotel. Across all departments any staff member who needed to order stock would contact the group finance team via E mail who would then raise a PO in an excel spreadsheet, after it was approved by their line manager. Quite often an invoice would be received for an order placed by staff that had no accompanying paperwork.

Areas where the business were losing time and money.

1. Delays in ordering led to costly last minute purchases from non preferred suppliers.
2. Relatively high staff turnover lead to questionable items being purchased.
3. Major overhead for the finance team when dealing with purchase requests and invoice matching.
4. The group finance team had very limited visibility of the overall financial liability of the company.

Action Taken

A PurchaseControl.com Enterprise Solution was implemented for the group with each hotel location having its own individual account on their dedicated server. As they had access to 500 user licences as part of the enterprise package every staff member at every location was provided with an account. Line managers were give authority to sign off on set levels of expenditure per month independently of the finance team.

A link was built between PurchaseControl.com and their Pegasus Opera2 accounts package allowing correctly processed invoices to be posted directly from PurchaseControl.com to the purchase ledgers.

Results

1. Invoice discrepancies diminished rapidly over a 2 month period.
2. Finance team spent fewer hours on purchase approval and reconciliation.
3. It became possible to accurately calculate what the company’s liability was on a monthly basis with accurate accrual reports.

Savings Calculations

The client indicated that after 6 months of using the system a number of part time finance staff members who had left were not replaced. This direct reduction in wages costs was greater than the total cost of implementing the enterprise system. After the first 12 months a 36 month deal was agreed.