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How Toronto Zenith Increased Contract Sizes Through Stronger Procurement Processes

About Toronto Zenith

Toronto Zenith is an industry-leading civil infrastructure contractor. Founded in 1959, the company has evolved from a concrete forming business to one of the most trusted builders of roads, bridges and railways in Ontario, Canada.

Toronto Zenith prides itself on its commitment to workplace safety and environmental management. As a systems-driven organization, they strive to continuously improve their processes, with the ultimate goal of achieving zero employee injuries, property damage and environmental threats.

With more than 60 years of operating history, Toronto Zenith’s dependable, ethical treatment of their customers, employees and environment has earned them a sterling reputation within the industry. This culture of respect is succinctly captured in their well-known motto, “Our word is concrete”.

 
Asher Roffel

VP Finance, Toronto Zenith

Asher Roffel is the VP of Finance at Toronto Zenith, and he brings a wealth of experience to his role. Throughout his career, Asher has worked in finance and accounting across both Canada and the US. Prior to joining the company in 2014, he completed a fellowship in New York City on global strategy and worked at Deloitte, auditing private organizations.

Today, Asher leads Toronto Zenith’s financial, administrative, and IT functions, and contributes to strategy and operations as a member of the senior management team. When he’s not working, he’s spending time with his five children or volunteering as a board member and treasurer at a small private school.

The Challenge

When Toronto Zenith first signed on with Procurify, the company had grown significantly. They were managing seven to 15 job sites on a regular basis, and the workforce that was managing and operating these projects had also substantially increased. In addition, as a general contractor, it was not unusual for them to recruit and oversee hundreds of contractors and unionized employees at a time.

While this growth was exciting for the company, it was clear to Asher Roffel, VP Finance at Toronto Zenith, that the increased operational complexity also called for more robust financial controls, especially in the procurement function.

“As far as accounting processes go, purchasing is our most time-intensive process,” Asher explains. “We do a few large projects at a time, and each of them are invoiced once per month, so things are pretty straightforward for Sales and Accounts Receivable. But in any given month, we could be processing thousands of transactions on the purchasing side.”

These purchases could include everything from building materials and concrete, to situational purchases like additional generators for a job site, or high-volume purchases of small items like safety gloves. The sheer quantity and diversity of the POs were overwhelming Toronto Zenith’s traditional procurement process.

Original Process

Prior to Procurify, Toronto Zenith employed a manual, time-intensive purchase order process. For every order, a triplicate purchase order was prepared using standard purchase order books. Eventually, these purchase orders would be matched up against receiving documents and invoices by finance and then sent to the appropriate approvers. After approval, purchase orders and invoices would be entered into the accounting manually.

Pain Points

The paper-based nature of Toronto Zenith’s procurement process resulted in severe inefficiencies and less than optimal financial controls. Lost paperwork and missing purchase order numbers were commonplace. It was also a huge time sink for senior management, who found themselves shuffling large quantities of low-value paperwork. And in a frustrating catch-22, the lack of standardized processes made it impractical to delegate these approvals to more junior staff and project managers lacked the necessary visibility into project spending.

Asher summed up the problem with a compelling visual metaphor: “The amount of paper we were dealing with was insane. I was manually signing off on stacks of paper that were three feet high each month!”

Toronto Zenith had reached a decision point. If the company wanted to sustain its pace of growth, their systems would have to evolve to support procurement at a much larger scale.

We started with the billing component because that’s something accounting could control on its end without inputs from other departments. We wanted to become subject matter experts in Procurify and be fully comfortable with the software before rolling it out to the rest of the company, so that we would be able to answer any questions other people might have.

ASHER ROFFEL
VP Finance, Toronto Zenith

Solutions

In searching for a modern procurement system, Toronto Zenith had two main goals:

To automate their manual approval process; and to cut down on paper and transition to digital record-keeping.

They evaluated a number of possible solutions, but decided on Procurify for three key reasons:

1. Operational, Cultural and Technical Fit

Toronto Zenith is not a Fortune 500 enterprise or a small startup, but a fast-growing mid-sized business. It was important to find a solution that was streamlined and affordable, but also robust enough to handle their high transaction volume and specific industry needs.

Asher puts it this way: “We’re not big enough to justify a full-blown, SAP-style system. But on the other hand, we’re not small enough that we could get away with an unstructured approach. Also, we needed something that fit our company culture. Where possible, we want to be systematic and process-oriented, especially compared with other companies of our size. Procurify definitely fits into our culture and is a competitive advantage for us.”

It was also important for the procurement solution to integrate with Jonas, Toronto Zenith’s construction-focused accounting software. The company hired an external developer to create a custom macro that automated the export of data from Procurify into Jonas, and Procurify was able to help them with the integration. The process was smooth and efficient, and the integration continues to work seamlessly to this day.

2. Great End User Experience

In evaluating various procurement systems, the finance team at Toronto Zenith adopted a very forward-thinking approach, focusing squarely on the needs of the end user.

“We were spending a lot of time on the phone with our project managers, chasing them for POs or checking if they approved a certain purchase,” explains Asher. “Project managers were the ones who asked if there was an easier way to do this by computer. So from the very beginning, our goal was to make things easier for the field staff, not for accounting.”

Asher was impressed with Procurify’s focus on the end user experience. Not only was the software simple and intuitive for non-technical users, it also had a great mobile app that was especially handy when out in the field. Having tried a number of other solutions that were clunky and overly complicated, Procurify stood out as the clear winner.

3. Low Risk Rollout

Aside from his financial duties, Asher is also in charge of IT management at Toronto Zenith. He’s familiar with the challenges of any brand new software deployment, and it was up to Asher to find ways to minimize the attendant risks.

To that end, the Procurify team suggested a phased rollout, where Toronto Zenith would implement individual modules over time, rather than switching the entire procurement process at once.

This phased approach helped build confidence in the modernized procurement process and was rewarded with strong buy-in from the rest of the organization.

Results

Three years since signing on with Procurify, Toronto Zenith has continued on their growth trajectory, winning and executing on increasingly larger and more complex projects. As Toronto Zenith has grown, so has their reliance on Procurify - all of the purchasing still happens through their system.

In fact, the team at Toronto Zenith credits Procurify with improving procurement practices across the board. In the words of one construction manager, “It’s difficult to name just one specific improvement, as it is better in every way. It’s made everything more efficient.”

There are three areas where Procurify has had an especially large impact:

1. Better Financial Controls

Prior to signing on with Procurify, Toronto Zenith’s manual, paper-based approval process made it impractical to enforce proper financial controls.

Due to the time-sensitive nature of worksite operations, employees made most purchases before the paper PO landed on a VP’s desk. This essentially turned the approval process into a post-hoc review process, as it would often be too late to cancel the purchase by the time a VP had the chance to see it.

Three-way matching was also a hit-or-miss affair. Whenever a specific invoice did not match the respective PO or receiving slip, it would be added to a growing pile on Asher’s desk and added to a master list of invoice disputes. It was impossible to cross-check the master list against the paper invoices, or to do analysis on historical trends.

The company solved these issues by transitioning to Procurify’s fully digital procurement process. Order requests are now digitized and transmitted instantly to the appropriate approvers. Invoices are stored in a database that can be easily exported and analyzed in Excel, allowing for easy cross-checking and historical analysis.

According to Asher, these changes have improved both the quality and efficiency of Toronto Zenith’s financial controls: “Since we’re no longer worried about having potential unresolved issues from the past 30 days, it’s a lot easier to do a hard cut-off at the end of each month. As a result, we’ve been able to speed up our month-end close.”

2. Accessible Pricing Data

In construction, historical pricing data is critical for making smart purchasing decisions.

Before Procurify, getting access to this data was a long and labour-intensive process. Field staff would ask finance to retrieve previous invoices for a specific item from a particular vendor. Finance would search for that vendor in the accounting system and manually determine which invoices included the particular item. Then they would go to the appropriate filing cabinet and retrieve the paper invoice, scan it and email it to the field staff.

With Procurify, finance can now search for the exact PO by job site and email a link to the field staff, who can then export a spreadsheet with links to all the associated PDF invoices. This accelerates the research process, facilitating consistent price discipline across all purchasing activity.

3. Streamlined Record-Keeping

In 2019, Toronto Zenith processed 7,000 vendor invoices, for a total of over 25,000 line items. But despite the huge growth in transactional volume, they haven’t had to hire any new administrative staff.

“Since Procurify automated many of our manual processes, we’ve been able to re-allocate our employees to more value-added tasks,” explains Asher. “Instead of having staff chasing down POs and packing slips, they’re now keeping product and price lists up to date, approving orders, and identifying discrepancies in pricing across jobs. We can do a lot more with the same number of people.”

There’s a lot of free storage space at head office, too, because the company no longer has to store paper records. Previously, each invoice would have to be attached to a cheque stub, purchase order, approval form, and assorted other documents that totaled 10-15 pages. Since this took up a lot of space, the documents had to be stored in bankers boxes in the office basement, which made it challenging to locate supporting records for claims, disputes or audit processes. 

Looking back on three years of growth with Procurify, Asher remarks, “We really appreciate what Procurify has done for us. We wanted a system that would help us more as we became more mature and we’ve definitely seen that so far. We’re excited to see how it continues to do so.”

In the past, when auditors wanted to see a hundred different invoices, it would take someone a whole day in the basement to find them. Now I just give the auditors a login to Procurify, or export a spreadsheet with links to all the invoices. The whole process takes about half an hour.

ASHER ROFFEL
VP Finance, Toronto Zenith

Learn How Strategic Procurement Delivers Efficient Spend Tracking

According to the Hackett Group, organizations with a strategic approach to procurement have seen operating costs lowered by 18%. Download our white paper and learn how strategic procurement benefits the whole company.

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COMPANY

Toronto Zenith is a Civil Infrastructure Contractor that delivers high-quality construction services in a safe and ethical manner. They pride themselves on being safe, trusted, and environmentally sensitive builders of infrastructure for the clients and communities they serve.

INDUSTRY

Construction

LOCATION

Concord, Ontario

COMPANY SIZE

51-250

WEBSITE

www.torontozenith.com

CHALLENGES

  • Visibility & Control
  • Manual Paper Processes
  • Time Wasted

RESULTS

  • Finicinal control
  • Accessible Pricing Data
  • Streamlined Record-Keeping
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