Overview of the Topic
The process of change represents a crucial component of growth for companies that must maintain competitiveness in business environments characterized by intense pressure to succeed. Change management is a comprehensive framework that applies a structured process and tools to lead the people-oriented side of change, thereby achieving desired outcomes (Harrison et al., 2021). This type of management is applied to help workers in an organization that is impacted by change make effective personal transitions, enabling them to engage with, adapt to, and utilize the change in the future. In the current scenario, the change management issue centers on replacing manual invoicing with automated solutions. The automation of invoice processing improves performance in this sector by streamlining invoice handling, reducing errors associated with manual entry, and facilitating faster payments.
The implementation of the change in the organization will be conducted using Lewin’s 3-Step Change Management Model, which describes three distinct phases an organization must complete to effect change: unfreezing, changing, and refreezing (Barrow et al., 2022). The model has been chosen due to its flexibility, which enables it to be applied to a wide range of scenarios, including various types of organizations, diverse employee opinions and perspectives, and managers’ capabilities (Pregmark, 2022).
The change process will occur at Cee Jae’s Meat & Seasonings, Jamaica Ltd. This company produces Jamaican-inspired seasonings and cured and preserved meats, including jerky and other deli meats. The type of operations in which the organization specializes in food product preparation. The quality and speed of production depend on how well other processes are streamlined, ensuring there are no disruptions or delays that can lead to customer dissatisfaction.
As a smaller-scale company with 50 employees that sells directly to consumers, Cee Jae’s Meat & Seasonings must ensure that invoice processing runs smoothly and does not negatively affect order processing. The company’s mission statement is: “Selling fresh and quality meats and seasonings to spice up your everyday meals.” The vision statement is: “To inspire our customers to incorporate Jamaican flavors into their cooking.” Overall, the change management process at Cee Jae’s Meat & Seasonings needs to enhance the organization’s operations, raising productivity and effectiveness to a new level.
Identifying and Addressing the Problem in Invoice Processing
Description of the Problem
Accounts payable represent an essential component of every business’s functioning. The team members responsible for this area must maintain accurate records, ensure suppliers are paid on time, and prevent unplanned expenses that could disrupt business operations. However, reliance on manual invoice processing for tracking and paying invoices creates several challenges, including slower processing, lost invoices, and double payments (Desai et al., 2021). Even though many businesses continue to rely on manual processes, the risks of ongoing operational inefficiencies are detrimental to team productivity.
Importance of the Problem
The problem needs to be resolved because it leads to errors during invoice processing and reduced efficiency. Conducting manual invoice management takes time that could be spent enhancing operations in other ways (Bardelli et al., 2020). Additionally, repetitive processes increase labor costs and divert resources away from more important goals and objectives. Even with steps to minimize issues such as delays in manual invoice handling, including improved coordination among departments or forecasting upcoming payments, human error is inevitable as long as invoices are handled manually.
Reducing reliance on manual invoice processing is crucial to minimizing the risk of fraud. In their study, the Association of Certified Fraud Examiners (2020) found that organizations lose 5% of their revenue to fraud each year, with the median loss per firm approximately $125,000. The departments responsible for accounts payable are the most vulnerable to both internal and external fraud.
Examples of internal fraud include cash embezzlement, fraudulent payments, and the manipulation of financial statements. Instances of external fraud include acts committed by parties not involved with the organization being subjected to it. In recent decades, cyberattacks have become especially prevalent, with 74% of organizations being targeted by payment scams (Certified Fraud Examiners, 2020). Manual handling of financial information increases companies’ vulnerability to cybercriminal fraud.
The inefficiency of the invoice-handling system needs to be addressed, as it is likely to strain supplier relationships. Even though it is possible to overlook an invoice issue if it occurs once or twice at most, if the problem persists and remains unaddressed, supplier relationships are likely to suffer due to delays or errors. Suppliers will be wary of a company that has invoice issues and will not offer discounts. In worst-case scenarios, a company may lose access to high-quality raw materials and goods from reliable suppliers and may have to compromise its competitiveness. This means that streamlined and effective processing of invoices and other documents, by extension, is imperative for ensuring that a business runs smoothly.
How the Problem Was Identified
The problem with over-reliance on manual invoice handling became more noticeable as frequent errors began to occur. With the increasing number of mistakes, payment delays, and fraud risks, this has also become a concern for the company’s management. Specifically, because invoices are often transferred between organizational departments and are subject to lengthy approval cycles, payment delays are almost inevitable.
Consequently, such delays have harmed the cash flow of suppliers who provide raw materials to the company, creating frustration and adversely affecting relationships between the organization and its suppliers. Payment delays have been shown to burden staff responsible for accounts payable, adding to their stress and workload. The issue became particularly concerning when a financial penalty was imposed for invoice delays.
The finance manager at Cee Jae’s Meat & Seasonings was becoming increasingly concerned after the penalty issue. When the manager inquired with the accounts payable department about the reasons for the numerous mistakes and delays, they responded that the volume of documentation is increasing, along with the number of new suppliers and customers, and that the workload is severe. The fact that employees were becoming unmotivated and dissatisfied with the manual work they had to do was a concern for Cee Jae’s Meat & Seasonings’ management, given the risk of losing skilled professionals.
Employee retention is a crucial goal for the company in question, particularly given its smaller scale. Everyone at the company knows one another and has been working together for some time, which has consistently contributed to high levels of satisfaction and retention. Therefore, workers’ limited productivity is unlikely to be their fault; rather, the piling up of increased workloads makes them unmotivated and ineffective.
Steps Taken to Address the Problem
Current Process Analysis
The findings by the finance manager at Cee Jae’s Meat & Seasonings pointed to the need for change, specifically in automating and streamlining invoice processing to save time, reduce invoice-handling costs, lower manual workloads, and allocate time to higher-level responsibilities. The first step in implementing the change involved a comprehensive reevaluation of the company’s invoice-handling process, including the parties receiving them, verification methods, and transmission formats (electronic vs. paper invoices). Considering all the processes involved in handling invoices has allowed the Finance Manager to gain a comprehensive understanding of the existing processes.
It was determined that numerous inconsistencies existed, with several individuals performing the same tasks, resulting in an excessive workload (Inegbedion et al., 2020). Consequently, it was demonstrated that the overall process was substandard, and payment delays occurred due to growing workloads and inefficiencies, thereby increasing the risk of errors and fraud. It was also determined that some accounts payable staff had to work overtime to handle their workload, which increased the long-term costs of invoice handling.
Selecting Accounting Software
Once the need for change was identified following comprehensive research into the outcomes of manual invoice handling, the finance manager explored available solutions to select the software best suited to the company’s accounts payable department’s needs. The objectives set for the software included reducing late fees, making real-time data easily accessible and viewable, providing cloud storage, and minimizing data entry errors. QuickBooks was the accounts payable software that the finance manager selected because it fit the needs of the smaller-scale organization. The solution is delivered by the Intuit global technology platform, which serves small businesses and helps them overcome their most pressing financial challenges.
The advantages of QuickBooks include its availability in both mobile and web-based versions, which offer the team responsible for handling invoices a lot of flexibility. For the chance, a cloud-based version was chosen because it allowed access to the data from anywhere, which the Finance Manager considered a significant advantage. The main features of QuickBooks that helped the manager decide in its favor included payment tracking, invoice management, and the ability to export data to Excel. With the mobile receipt capture tool, manual data entry was no longer needed.
Implementing the Software
The third step involved transitioning from manual invoice handling to QuickBooks. The solution was introduced to the accounts payable team, which was given around a month to restructure invoice handling using the software. The team reported that the software was easy to set up and that guidance instructions were embedded, helping users adjust to the application and make fewer mistakes. Once the data was input into the software, it became easier to review account balances, access invoice workflows, and compile reports directly from the dashboard. Finally, the workers noted that they liked the software’s Business Overview tab because it quickly broke down essential data, including cash flow, profitability, sales, and income.
Resistance to Change
The greatest resistance to change stemmed from the accounts payable team’s familiarity with manual invoicing, which had been in place since the company’s inception. Manual processing was more time-intensive and expensive than the automated solution. While there was general agreement that manual processing increased the risk of staff mistakes, caused delays, and led to overall productivity loss, the workers resisted the change because they felt they were not adequately educated on how to use the software. However, for the most part, the frustration the accounts payable team experienced in handling invoices manually made them less resistant to the change. The consensus that outdated processes needed to change motivated employees to be highly engaged in the change process, as they understood that the software would make their work more efficient and effective.
Applying Change Management Theory to Implement Automation
Change Management Theory
Change theories were developed to describe how effectively organizations can adjust their structures, strategies, and processes. The choice of change management theory for Cee Jae’s Meat & Seasonings was based on the organization’s size, the issue at hand, and available resources. Kurt Lewin’s change model outlines three stages in the process of organizational change (Burnes, 2019). Lewin has been deemed the “practical theorist” of change due to the flexibility of his change model and its practical value to organizations within a short timeframe (Hussain et al., 2018).
The approach implemented by the theorist comprised three crucial elements of change: the identification and reduction of key forces within stakeholders’ living space, actions conducive to change, and the strengthening of forces in a new status quo to sustain the changed behaviors (Burnes, 2019). Notably, the three-stage theory suggests that merely defining the need for change and implementing it in life is insufficient. Permanency that is embedded after the change process is completed is the defining factor in determining whether the change will have a lasting impact.
Unfreeze
The first step in the change management process aligns with Stage 1, “Unfreeze,” which prepares an organization to accept that change is necessary. Specifically, it involves breaking down the existing processes to replace them with new ways of operation. At this stage, the finance manager needed to develop a compelling message that would illustrate the existing process was inefficient and could not continue without change. The manager presented the findings of their review, showing that the costs of invoice handling increased while the rate of mistakes per invoice was rising. Additionally, several suppliers reported complaints, as well as concerns about customer satisfaction surveys.
The report’s findings enabled the manager to obtain support from the accounts payable staff, who had complained about the inefficiency of manual invoice handling. While the team was cautious about the change, there was a consensus that it was necessary and should be implemented sooner rather than later. The finance manager played a defining role at the “unfreeze” stage, framing the issue as essential to resolving for the organization as a whole. The message about the necessity of the change process was linked to the opportunity to restructure invoice handling, reduce delays and errors, and make staff operations more seamless and efficient.
Change
Stage 2 of Lewin’s change management theory involves the actual change, which occurs after the need for adjustments and restructuring has been identified. It should be noted that the transition from the previous stage to the actual change itself takes some time, as it involves educating employees on the processes they will follow to implement the change. The emphasis is on employees’ personal transitions in a changing environment, aiming to make the change a positive overall experience that does not result in severe disruptions. As noted by Hussain (2018), stimulating the change process involves introducing the change to employees. Those in positions of leadership are expected to provide education, communicate with workers, encourage participation, support them during tasks, offer emotional support and incentives, and implement any other efforts conducive to the change process.
Refreeze
The third and final step of the change management model is Stage 3: Refreeze, which occurs after the changes have become embedded in the organizational structure, resulting in new processes and ways of working. Indicators of the refreeze stage include consistent job descriptions, a stable organizational chart, and overall consensus that the implemented change was indeed needed (Schein, 2018).
The refreeze stage also requires helping workers and the organization as a whole to internalize and institutionalize the changes. This involves ensuring that changes are consistently applied and integrated into everyday business operations. At this stage, when QuickBooks invoice management became an essential part of the accounts payable team’s operations, the workers gained a sense of stability. They began to feel more confident and comfortable.
The rationale for establishing a new sense of normal within the organization is concerned with the ability of businesses to adapt to the ever-changing needs of a competitive environment. Change is inevitable in any organization, which is why a refreeze stage is essential to prevent workers from getting caught in a transitional trap. This creates a situation in which workers are unsure how to proceed, leading to tasks not being completed to their full potential. Finally, a new “frozen” state is necessary because, without it, it is complicated to address new change initiatives effectively (Cummings et al., 2016). In particular, it will be challenging for managers to convince workers that new adjustments are needed if a previous change process has not been completed.
Effectiveness of the Steps Taken
The steps taken during the implementation of the change process were practical because they enabled the smooth integration of QuickBooks into the company’s everyday operations. The three stages, which aligned with Lewin’s model of change, were broken down into actionable steps that the team implemented. The emphasis of the steps was ensuring that the team is engaged in the transformation and is allowed to provide feedback on their past and future operations (Walk, 2023).
Specifically, the steps taken by the change leader were highly conducive to the successful implementation of the change. For instance, as part of the refreezing process, the finance manager took the lead in encouraging the team to celebrate the successful integration of QuickBooks software into their operations. The celebration brought closure to the change process and provided an opportunity to reflect on both positive and negative takeaways (Ericsson, 2020). Even though resistance to change did not significantly limit the change process, it does not mean that future changes will be met with no resistance. The change process allowed management at Cee Jae’s Meat & Seasonings to understand workers’ attitudes toward it and their propensity to learn new things.
Efforts Initiated to Implement the Planned Changes
Collaboration, education, and reflection were the main efforts initiated to implement the planned changes. The collaboration at Cee Jae’s Meat & Seasonings was possible because the staff agreed that manual invoice handling is ineffective and counterproductive. The accounts payable team was encouraged to share their perspectives on the issues they were encountering, which significantly influenced the selection of the invoicing solution.
Education played a crucial role when the finance manager determined that QuickBooks would be the best solution for the team, who needed to be informed about the software’s features and how to integrate it into their everyday invoice handling. As the majority of employees from the accounts payable team had worked at the company since its inception and were thus accustomed to managing invoices manually, they had to restructure their entire process.
Through the education and support of the finance manager, it was possible to gradually introduce the software and integrate it into the company’s regular operations. Finally, at every step of the change process, the leader encouraged the team to reflect on how well the process was going, what was successful, and what could be changed (Crevani et al., 2021). Even though some mistakes can occur as part of the work, the automation enabled by QuickBooks helped Cee Jae’s Meat & Seasonings overcome delays and errors during manual data entry and reduce the team’s excessive workload.
Conclusion
To conclude, the change process implemented at Cee Jae’s Meat & Seasonings went hand in hand with the need to digitalize and automate workplaces, freeing up more time for employees to be creative and dedicate themselves to more critical tasks. Manual invoice processing harmed employees’ productivity and created unnecessary work. It was found that the more time is spent on processing invoices, correcting mistakes, and addressing inefficiencies, the less productive the team will become.
The three steps that aligned with Lewin’s model enabled the successful introduction of QuickBooks software, educated and engaged workers, and seamlessly integrated the solution. The unfreeze, change, and refreeze stages form a flexible framework in which resistance to change can be addressed naturally, through continuous worker engagement in reflection on benefits and limitations. The role of the finance manager was especially relevant in the change process because they took the lead and provided strong support to employees during the restructuring of processes.
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