Client: United States Agency for International Development

2001-2002, Segir GBTI

For the Alexandria Electric Company, under a subcontract to Nexant, CARANA is re-engineering the cost accounting functions of the generation and distribution companies. Re-engineering includes the implementation of automated accounting systems at each of the converted enterprises. In addition, CARANA is re-engineering the metering, billing, and collections processes within this company.

CARANA is working with two energy enterprises to implement Activity Based Accounting (ABC), including the establishment of Cost Centers and Profit Centers to rationally allocate indirect costs to the services that generate these costs, and to provide managers with a framework for making sound business decisions to more clearly determine the true costs of generating electricity. CARANA is:

• Preparing ABC models that show application of ABC techniques within the enterprise.
• Creating ABC breakdown of processes, tasks, and costs to provide information in building the database of enterprise processes.
• Constructing an automated time logging capacity to help gather the implicit costs of each task.

In re-engineering the company's billing and collection functions, CARANA is:

• Reviewing inefficiency and cost ineffectiveness of meter reading and bill preparation cycles to identify ways to reduce cycle time, increase cash flow, and reduce cost.
• Reviewing collection efforts to improve billing and cash collection cycles.
• Reviewing handling of cash collections to identify areas for improved service and alternative arrangements.

For the project, CARANA has developed a series of training courses and manuals on the subjects of 1) activity based cost accounting, 2) process mapping, 3) business process improvement and benchmarking, and 4) value-added analysis, best practices, and total quality management.