In 2010, while working for a large multi-national corporation, we noticed differences in accounting practices from one site or country to the next; specifically in how the Goods In Transit Accrual was calculated. Working in Supply Chain, our performance was measured by Days In Inventory (DII), which was impacted by this accrual. After a great deal of research and many conversations with the Finance leads in various locations, we realized that we were doing it all wrong!

We developed a process that shifted the basis on which inventory was recognized, built reports to help Finance and Purchasing calculate the accrual, and in 2013 we changed the process at over 100 locations in less than a month. The process has been audited and approved by two of the “Big Four” accounting firms ever since.

This process change reduced global inventory by over $200M, drove savings of over $250K per month for the Finance and Purchasing departments, and reduced the time to close at the end of the period by 2 days!

Although actual savings will depend on the size of your business, we would love to show you how to implement this process and improve your bottom line!