El Hogar Community Services’ mission is to provide services that contribute to the mental health and emotional well-being of individuals and families in the community.
Established in 1977 as a not-for-profit organization, it today has 5 different programs to help serve the community from senior care to specialized mental health services.
When Beatrix Koev (Fiscal Director, Elhogar) joined the nonprofit in 2018, One of her key objectives was to have complete visibility into expenses.
Not only it was good finance hygiene, but Elhogar also has cost-reimbursement contracts in place with the County they serve. So the sooner they know the expenses, the sooner they can get reimbursed.
She needed the spend visibility so that she can provide complete transparency to all the stakeholders.
The purchasing process was very manual. Employees from different programs would fill in a requisition form, which was then submitted for approval via email.
This caused a lack of transparency because the Finance team won’t know what is being approved.
When Elhogar decided to automate the purchase request process, it was not just a technical challenge but a culture challenge too.
“The biggest challenge was the culture-switch, going from old school paper tracking to modernizing our purchasing practices.“
Not only that, most of the purchases were settled using a credit card. Beatrix’s team had to wait for employees to submit their expenses before they know the amount to be reimbursed.
“We experienced serious delays and confusion in regards to what purchases were planned, what purchases were approved, what purchases were already placed. With cost-reimbursement contracts in place, it was of utmost importance to be aware of purchasing commitments as soon as possible.“
Since Elhogar is a non for profit organization, the stakeholders required complete transparency into the Spend.
“We deal with public funds, complete transparency and regulatory compliance are very important to us. Also, seeing purchases in real-time allows us to invoice our contracts for reimbursement much faster, which in turn helped ease cash flow constraints“
When we engaged with Elhogar’s team, the process was completely manual.
The first priority was to automate the purchase approval process. The biggest challenge was keeping the process simple so that adoption is not a challenge.
We first started with all approvals going to the Directors and the CEO. That caused the bottleneck at the CEO’s level because she had to approve all purchases.
We quickly pivoted to self approvals by Directors so that 80% of the requests are managed at the program level.
We then looked at reducing the effort for creating the purchase requisitions. We looked at the top vendors by spend and implemented catalogs so that repeat purchases are made easier.
Regarding ProcureDesk implementation – the Elhogar team said:
“It is a flexible system that offers all the meat and potatoes of the purchasing process and ERP requirements, yet, very easily learned and implemented. Simplicity without compromising the purchasing needs“
Making purchasing seamless is not solved by just implementing a purchasing tool, it is solved by working with the partner to adjust the process as per your needs.
“The more information we provide during implementation, the better the system is customized to our needs.“
We set up the system and we were live within 2-3 weeks.
The team was not used to a purchase order process, so we walked them through the different scenarios and how it would speed up the time to create requisitions.
They went from spending 10-15 minutes filling a requisition form to creating a purchase order request in under a few minutes.
The approval process was streamlined too because employees can see the status of purchase requests in realtime.
With the automated approvals and shifting the accountability to program owners, the approval cycle reduced by more than 50%.
The team summarizes the results as follows.
“Clear oversight of monthly purchasing activities, speedy integration of payables into the accounting system, audit-proof approval process“