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You have learned about Six Sigma methodology and the ways in which it can benefit your business by reducing defects and increasing efficiency, morale, and productivity. Now you want to learn how to earn Six Sigma certification and apply its principles to your organization’s processes to positively influence the future of your company.

The final part in our Lean Six Sigma series will explain certification levels and show how certification can benefit your business and your employees.

The skill levels of Six Sigma demonstrate various degrees of proficiency and experience in improving business processes and increasing efficiency. There are five certification levels, which accreditation bodies such as the American Society for Quality recognize.

These accredited programs offer training classes on Six Sigma. Skill levels include:

• White Belt. This basic training involves the Six Sigma basic concepts and supporting change management. White belts develop teams that solve problems in company projects.
• Yellow Belt. A yellow belt has a basic comprehension of Six Sigma and supports the efforts of green belts and black belts.
• Green Belt. Six Sigma green belts collect data and work together with black belts. Their responsibilities generally extend beyond the Six Sigma project.
• Black Belt. Six Sigma black belts are fully engaged in the project and oversee it full time. They are project managers who train and call the shots for green, yellow, and white belts.
• Master Black Belt. This is the highest level of Six Sigma training. The master black belts act as coaches, consultants, and experts that lower level Six Sigma professionals turn to when problems arise. They develop key metrics, strategize, and solve difficult issues.

Gilmore Jasion Mahler’s six green belts have shared Six Sigma goals with our entire firm and helped all staff to embrace these new ways of thinking and new processes. Many of the internal process changes in recent years are directly attributable to Lean Six Sigma.

GJM staff certified in Six Sigma have also been able to share best practices with clients.

“This is knowledge that can help any business to streamline, be more efficient and save time & money,” says GJM Partner Mike Brough who is a member of the firm’s Manufacturing Specialist Team. “I’ve had the opportunity to share some ideas with manufacturing clients that they can take back to their staff and implement.”

Having Six Sigma certification has benefits from a professional development standpoint as well. For example, certification noted on a resume could help you land a rewarding and lucrative job. Employers know that certification for higher level belts involves years of work and studies. As a business owner, Six Sigma certification within your organization increases productivity, reduces defects, and brings in more revenue. To get certified start by finding an accredited training program in your area or you can pursue online and virtual training options. Enroll yourself and interested employees in the program, then be prepared to study. It’s a rigorous and challenging program. The exams are serious accomplishments. The yellow belt test takes around two hours, the green belt exam takes roughly three hours, and for the black belt, four hours of exam time is normal. Lastly, complete your written exam and projects to earn your belt. Then take your knowledge back to your team and you’re on your way.

Established in 1996, Gilmore Jasion Mahler, LTD (GJM) is the largest public accounting firm in Northwest Ohio, with offices in Maumee and Findlay. Locally owned, GJM offers cloud-based accounting and provides comprehensive services including assurance, business advisory, tax, risk advisory, healthcare management and outsourced accounting. The Firm’s professionals specialize in industries including construction & real estate, healthcare, manufacturing & distribution and utilities. 

Implementing Lean Six Sigma management principles in your operations can benefit your company by utilizing data, statistics, and measurements to eliminate defects in your processes. Once inefficiencies in your business’ processes have been identified, the Six Sigma methodology applies the use of proper tools to decrease defects and anything that doesn’t fit client specifications. 

Part two of our three-part series on Lean Six Sigma will focus on why your company might pursue the methodology and what will you and your staff get out of it. We’ll also share how Gilmore Jasion Mahler has embraced Lean Six Sigma and some of the benefits we have seen in our own firm.

Lean Six Sigma’s goal is pretty simple: to improve efficiency and eliminate waste. What type of improvements might you see?

• Reduced Cycle Time. If you have experienced missed deadlines due to unexpected delays in projects or shifts in management policy, Six Sigma can help by setting up a team that can identify the reasons for long cycle times and find solutions to these problems. Lean Six Sigma says in many cases, cycle times are reduced by up to 35%.
• Motivated Employees. Employees need their companies to fully engage with them to keep them on task. Six Sigma problem solving tools improve employee development and create the proper environment to keep workers motivated. Properly motivated employees experience a 25-50% increase in productivity.
• Improved Customer Loyalty. Better quality control and improved processes through Six Sigma result in a consistently better product and more satisfied clients. It’s no secret that when your customers are happy with your product, they return to you for future needs and recommend your company to others.
• Help With Time Management. The principles of Lean Six Sigma involve looking at learning, performance, and fulfillment. Having employees set goals and apply these principles to their work ethic leads to more effectively managed time. The action plan that Six Sigma helps employees to develop is said to increase efficiency by up to 30%.
• Better Managed Supply Chain. Reducing the number of suppliers your company uses is a key component of the Six Sigma methodology. Changes and variations in the supply chain have an effect on the defect rate of your product, so reducing the number of suppliers reduces the chance of defects in your products.
• Improved Bottom Line. The customer loyalty mentioned above directly affects your profits in a very basic way. Your happy customers continue to buy from you and will likely recommend your company to others who are looking for a similar product. This leads to increased revenues for your company.

For several years Gilmore Jasion Mahler has been engaged with the Lean Six Sigma methodology. The firm currently has six green belts who have conducted various projects throughout our firm. We’ve embraced the mind-set and applied Lean to all facets of our business: from employee expense account reimbursement to the client experience.

“We’ve learned that sometimes we had to ‘fail forward,’ in other words, we needed to learn that not every project was going to be a success, but we learned something from every project that we implemented,” says GJM Partner Deanna Hall, who is a Six Sigma green belt.

Here are five critical factors that led to GJM’s success with Lean Six Sigma:

1. Buy-in from the top
2. Change in mindset across the firm – needed to change to a mindset of continuous improvement, always “hungry” for improvement
3. Adopted the motto:  Strive for Excellence, Not Perfection
4. Get all levels in the firm involved – could not just be at the management level
5. Understand that change is hard for most people  

Change may be hard, but it isn’t impossible. Sometimes starting with smaller changes can demonstrate the ability to improve processes and encourage staff to embrace larger Lean initiatives moving forward.

Part one of our series on Lean Six Sigma offers some basic information, including the basic principles and definitions of the methodology. Be sure to watch for the next part in our series, which will cover what’s involved in acquiring Lean Six Sigma certification.

Established in 1996, Gilmore Jasion Mahler, LTD (GJM) is the largest public accounting firm in Northwest Ohio, with offices in Maumee and Findlay. Locally owned, GJM offers cloud-based accounting and provides comprehensive services including assurance, business advisory, tax, risk advisory, healthcare management and outsourced accounting. The Firm’s professionals specialize in industries including construction & real estate, healthcare, manufacturing & distribution and utilities.

Gilmore Jasion Mahler is pleased to announce that continued growth has led to a number of promotions and further strengthening of the leadership team at Gilmore Jasion Mahler (GJM).

Greg Taylor, CPA joined Gilmore Jasion Mahler in October as a partner. A member of the GJM Manufacturing Specialist Group, Greg brings to his role thirty years of experience in both public accounting and industry, having worked as a chief financial offer/vice president of finance for multiple businesses. 

J. Kenneth Saggese, CPA was promoted to partner in the assurance department after eleven years with the firm. A member of GJM’s Construction and Real Estate Specialist Team, Ken works with clients across the industry, with an expertise in affordable housing.  

Mike Brough, CPA was also recently promoted from senior manager to partner in the assurance department. Mike works in a number of industries, including manufacturing & distribution, government, and nonprofit. Among his areas of expertise: employee benefit plans.

Other recent promotions at Gilmore Jasion Mahler include:

Healthcare Specialist Group members Matt Cavanagh and Jamie Dixon have been promoted to senior manager. Construction Specialist Group member Alex Spieker has been promoted to manager and Ben Lochbihler, also a member of the construction team, has been promoted to supervisor. A number of GJM associates have been promoted to senior associate, including Cole Bruner, Jennifer Bryant, Mackenzie Gross, Stacie Heitmeyer, Krista Huff, Hannah Nowak, Lucas Pennington, Sadie Purk and Jodi Rabquer.

The GJM administrative team has grown as well, with the addition of Amy McCurdy and Karen Mossing. They join administrative team members, many of whom have been in their roles for ten to twenty years, or longer.

”It’s exciting to see the changes at Gilmore Jasion Mahler,” says Managing Partner Kevin Gilmore. “I’m proud of the accomplishments of our staff, and pleased to have Greg Taylor join our already strong leadership team. We’ve put together a team of the best public accounting professionals in the area to serve our clients.”

Established in 1996, Gilmore Jasion Mahler, LTD is the largest public accounting firm in the region, with offices in Maumee and Findlay. Locally owned, GJM offers comprehensive financial services including assurance, business advisory, tax, risk advisory and healthcare management. GJM’s professionals specialize in industries including construction & real estate, healthcare, manufacturing & distribution and utilities.

New revenue recognition standards are just about here. Is your manufacturing business ready? If not, you need to educate yourself on how these changes will affect your business. All manufacturers and distributors will be affected by the new standards. Gilmore Jasion Mahler's Mike Brough compiled this mini to do list to get you started.

1. Develop a revenue recognition team to help lead the efforts. This will require involvement from individuals throughout your business (not just the accounting department).
2. Review the five step approach (as outlined in our recent GJM revenue recognition blog), as this will allow for your team to identify areas where you’ll see the biggest changes.
3. Decide whether to adopt the full retrospective (updating prior years) or a modified retrospective approach.
4. Review existing and soon-to-be entered into contracts/agreements to see if there are performance obligations embedded in the contract/agreement. Some of these contracts/agreements may need to be revised prior to the effective date (good idea to revise a year prior) of the new standard.
5. Touch base with your information system provider to see how they will be assisting their customers with the new revenue recognition standard.
6. Review your bank covenants with your financial institution as the new revenue recognition standard may have a negative impact on your covenant and might require an amendment.
7. Review your current profit sharing calculations as delayed or early revenue recognition may have a significant impact on payouts.

Remember, the clock is ticking. Parts of the new standard go into effect for periods beginning after December 15, 2017 for public entities and for periods beginning after December 15, 2018 for all other entities. If you have questions or concerns, you should discuss them with your accountant.

GJM is the largest locally owned public accounting firm in Northwest Ohio. Whether you have a small business or a huge conglomerate, contact us to find out how we can help you prepare for the change.

GJM’s Mike Brough contributed this blog. Mike is a partner in the Gilmore Jasion Mahler assurance department. With over 13 years of public accounting experience, Mike works in a variety of industries, including manufacturing & distribution, government, and nonprofit operations.

New accounting standards for revenue recognition affect multiple facets of business. Some companies have not started preparing for change and will quickly fall behind due to the tracking of data. Changes affect accounting, IT systems, legal departments, bank covenants, human resources, and more. The changes apply to all businesses and companies that use U.S. GAAP (Generally Accepted Accounting Principles) accounting standards.

The new standards are better understood when you think of them as a five-step process.

1. Identify the Contract

After you close a deal with a new client, determine whether or not it actually counts as a contract. Here is what the new standard says:

• A contract can be written or oral, but both parties must agree to specific goods, services, and payment.
• A contract makes it clear who is giving and who is receiving, and identifies the rights of both sides.
• A contract has “commercial substance.” The exchange is worth something. Collectability is probable, so most likely you will get paid.

Business IT systems are now required to track the start and end date for contracts. Human resources departments will also require extensive training to implement the new standard. Sales people, executive leadership, and those involved in investor relations should familiarize themselves with the new standard.

2. Spell Out Performance Obligations

If you determine that you do have a contract, spell out who’s doing what. According to the new standard, each performance obligation needs to be broken down into separate pieces or bundles. If the customer can use the goods or services by themselves, those items are considered distinct. If they must be used in conjunction with other items in the contract, they are not distinct. Each bundle of goods makes up one distinct performance obligation.

Legal departments will need to study the new standard and adjust contract terms to meet new standards. Management has some flexibility in identifying and grouping performance obligations. Both legal and accounting experts can provide guidance. The revenue for each bundle will each be reported separately.

3. Determine Transaction Price

The new standard introduces several considerations when determining transaction price. Discounts, rebates, refunds and royalties must be taken into account. If the customer is not paying cash, goods and services exchanged should be at fair value.

The new standard involves making estimates and judgements, then using data gathering to report. Accounting departments will be responsible for developing processes and controls to implement the standard.

4. Allocate Transaction Price

Revenue should be recognized as the business completes each distinct performance obligation. The price should reflect discounts, rebates, and sales.

5. Recognize Revenue by Performance Obligation

When the customer satisfies their obligation, the business recognizes revenue separated by each performance obligation satisfied.

The new standard changes the timing of revenue recognition. The change can affect companies when it comes to commission, bonuses, or revenue-linked compensation. Old-style systems won’t work and could create legal challenges.

The Clock is Ticking

Aspects of the new standard go into effect for periods beginning after December 15, 2017 for public entities and for periods beginning after December 15, 2018 for all other entities; however, a retrospective approach (full retrospective or modified retrospective) is required. This means that you will need to be able to track the data a year prior to the effective date. Many companies are struggling to implement changes with such wide-reaching implications. If you have questions or concerns about the new standards, discuss them with your accountant.

GJM is the largest locally owned public accounting firm in Northwest Ohio. Whether you have a small business or a huge conglomerate, contact us to find out how we can help you prepare for the change.

GJM's Mike Brough contributed this blog. Mike is a partner in the Gilmore Jasion Mahler assurance department. With over 13 years of public accounting experience, he works in a variety of industries including manufacturing & distribution, government, and nonprofit operations.