Measure the Cost of Poor Quality

Cost of Poor Quality

  1. Adjustments made to revenue on a prior period
  2. Adjustments made manually through offline systems
  3. Daily adjustments in offline systems
  4. Many unused service items
  5. How many people report service contract issues?
  6. How much effort does it require to handle the issue?
  7. How many people have to be involved?

In the worst case scenario…

  1. You could have an entirely different process path
    1. 80% of this effort would be waste
    2. 80% of these transactions introduce errors on audit reports
  2. Your original transactions have defects that would be non-conformance defects
  3. Your 80% duplicates become the evidence of poor accounting practices
    1. Your accuracy on your financial statements becomes 20% accurate 
    2. Your risk becomes 80%
    3. Your operational cost become twice the norm making you less profitable.

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