How K. Hovnanian transformed AP to keep homebuilding moving

Centralizing AP in the middle of a crisis

When David Amador joined K. Hovnanian Homes, nearly everything was changing at once.

It was 2020, during the height of the COVID-19 pandemic. Employees were spaced throughout a large office building, working behind masks and walking hundreds of steps when they needed to speak with a colleague.

Accounts payable was also undergoing its own transformation.

Historically, K. Hovnanian had operated several AP teams across the country. Different divisions followed different procedures, approval structures, and invoice coding practices. The company was now bringing that work together in a newly formed shared services organization.

Amador joined as National Accounts Payable Manager, Shared Services, with responsibility for helping stabilize and centralize the function.

Most of the team was new. A small group inherited from the company’s northeastern division understood the business, but many other employees had to learn K. Hovnanian’s systems, vendors, and operating model while the new department was still being designed.

The initial structure included one supervisor, approximately eight clerks, and a small supporting accounting team. It quickly became clear that the group did not have enough capacity.

“I would walk into the supervisor’s office to ask a question, and her glasses would start fogging up because she was crying behind her mask,” Amador said. “We were overwhelmed.”

K. Hovnanian added another supervisor and brought in five temporary workers. At its peak, approximately 13 people were performing clerical AP work.

Even with the additional support, the team struggled to keep up.

One company, many ways to process an invoice

K. Hovnanian had grown through acquisitions, and some acquired businesses retained their historical processes.

The East Coast divisions generally followed one approach. Some western divisions followed another. In certain locations, employees stamped invoices and wrote accounting codes by hand. AP clerks then had to interpret the handwriting and reenter the information.

A seven could look like a four. An unclear department code could send an invoice to the wrong account. Every manual transfer introduced another opportunity for error.

Approval rules added even more complexity.

Each division maintained its own workflow matrix. The appropriate approver could depend on the office, vendor category, department, or dollar amount. When an invoice arrived, an AP employee might have to consult a matrix, identify the correct manager, and compare the signature on the invoice with an authorized name.

Repeating that process across hundreds of invoices made centralization difficult to scale.

The challenges included:

• Multiple AP teams using different regional processes
• Handwritten coding and stamped paper invoices
• Repeated manual data entry
• Division-specific approval matrices
• Difficulty identifying authorized signatures
• High risk of coding and routing errors
• Limited standardization across acquired businesses
• A newly formed team without sufficient capacity
• Excessive time spent on clerical work instead of exception management
• Paper-based processes that were especially difficult during the pandemic

The new shared services function had centralized responsibility. It still needed a centralized way to execute the work.

Stabilize first, then transform

K. Hovnanian had identified Chrome River, now Emburse Enterprise, as its future platform before Amador joined the organization.

But implementation could not begin immediately.

The AP team first needed to stabilize its processes, understand regional differences, and establish a workable organizational structure. That effort took approximately a year.

K. Hovnanian then began its Emburse rollout with a controlled pilot. The company started with corporate AP and its Cleveland division, a business unit that had worked effectively with shared services during previous system implementations.

The initial configurations were relatively straightforward. Corporate invoices could route according to department codes, while Cleveland could use vendor categories.

Once the company began bringing larger and more operationally complex divisions onto the platform, the requirements changed.

A construction manager working at a homesite often has the most useful context for an invoice. That person knows what was ordered, which community or home should receive the cost, and whether the work was completed.

Some divisions therefore needed field employees to code and approve invoices before they reached AP.

K. Hovnanian worked with an Emburse consultant to translate each division’s approval requirements into configurable workflow logic. The teams tested the configurations, completed user acceptance testing, and introduced the platform one division at a time.

“The beauty of it was that we could roll it out division by division and work out the issues as we went,” Amador said.

That phased approach gave the company room to standardize without ignoring the realities of different markets and business units.

Centralizing control without centralizing every task

The new process changed where invoice knowledge entered the workflow.

Under the old model, a small AP team retyped information that someone elsewhere in the business had already written down. The person entering the data often had less context than the construction manager, office administrator, or division employee who had ordered the goods or services.

With Emburse, employees closer to the transaction can provide the coding and business context. Configured rules then validate the information and route the invoice according to vendor category, department, payment threshold, or other business requirements.

AP retains centralized oversight, but it no longer has to perform every keystroke.

Amador described the change as distributing the work across the people who understand each invoice while allowing the shared services team to concentrate on exceptions.

Instead of several clerks entering hundreds of invoices, individual employees might handle only the few transactions connected to their work. Emburse then applies consistent controls across those decentralized inputs.

The process combines local expertise with centralized governance.

From 13 data-entry clerks to six AP analysts

Five years after centralization began, the K. Hovnanian AP organization looks very different.

The clerical staffing requirement declined from approximately 13 people to six. Those remaining roles also evolved.

Employees who once spent most of their time reading numbers and entering them into a system now perform work closer to that of AP analysts.

They focus on:

• Resolving invoice exceptions
• Supporting internal customers
• Reviewing invoice-tracking reports
• Monitoring aging invoices
• Investigating outstanding checks
• Preventing checks from becoming unclaimed property
• Managing lien-release requirements
• Working with vendors to resolve recurring issues
• Identifying risks before they interrupt operations

“The work went from seeing a seven and typing a seven to using more logic, understanding, and judgment,” Amador said. “That increased the value of the roles, and I think the team is happier that way.”

Automation did not simply reduce the number of people required for data entry. It elevated what the team could contribute.

Success at a glance

• Reduced the AP clerical staffing requirement from approximately 13 people to six
• Shifted remaining roles from data entry toward analysis, exceptions, and customer service
• Automated invoice capture through OCR and configurable workflows
• Standardized approval routing across geographically distributed divisions
• Reduced manual interpretation of handwritten coding and signatures
• Introduced a phased, division-by-division implementation model
• Gave field teams greater ownership of invoice coding and validation
• Improved tracking of aging invoices and outstanding checks
• Created more capacity for vendor management and operational risk prevention
• Replaced some check-based purchases with Emburse Card transactions

AP work that keeps the lights on

In homebuilding, a late invoice can have consequences far beyond the finance department.

Utility companies may treat an active development differently from a conventional residential customer. When an invoice is not paid, a provider may disconnect power across an entire community under construction.

Before Emburse, one missed utility payment led to exactly that situation.

Power was shut off across an active K. Hovnanian community. Construction teams could not use their electric tools. Computers in the sales center stopped working. The company’s CEO was expected to visit the development the following day.

AP had to drop everything and resolve the issue.

“You cannot have the CEO arrive at a community where none of the power is working,” Amador said. “You try not to panic, but it is human nature to panic.”

The incident illustrated why back-office performance is inseparable from front-line execution.

An unpaid invoice can stop a saw at a construction site. It can shut down a sales center. It can delay the work required to complete and sell a home.

That is why greater AP efficiency mattered.

With less time devoted to manual entry, Amador’s team could build stronger relationships with utility providers, brokers, and division employees. The team began holding meetings with the parties responsible for utility accounts and creating clearer reconciliation processes.

In some cases, utility providers now send a complete group of invoices with a master total. AP can confirm that the individual charges reconcile to that amount and identify missing bills before a payment deadline.

The stronger relationship also encourages providers to alert K. Hovnanian when they see a potential issue, rather than proceeding directly to disconnection.

“Because we are working well together and making their lives easier, they proactively let us know when they see a problem,” Amador said. “We can keep our finger on the pulse.”

Invoice automation created the capacity to prevent disruption instead of merely reacting to it.

Protecting homes from lien risk

The higher-value work varies by region.

In California, for example, material suppliers can place liens on properties when payment and documentation requirements are not handled correctly. An unresolved lien can prevent K. Hovnanian from completing the sale of a home.

That makes lien-release management an essential AP responsibility.

A team consumed by invoice entry has less time to track the documents, vendors, and payment statuses associated with that risk. A team focused on exceptions can investigate issues sooner and support the company’s ability to deliver completed homes to buyers.

The transformation turned AP capacity into operational protection.

Replacing permit checks with card payments

Invoice automation was not the only opportunity K. Hovnanian identified.

Building a home requires permits from local municipalities, and every township has its own payment process. Historically, employees submitted urgent check requests to AP. The company would produce a check remotely so an employee could take it to the municipality and obtain the required permit.

Sometimes the checks were prepared weeks in advance.

Plans could change. A check might no longer be needed, remain uncashed, or become lost. AP then had to research the payment, issue a stop-payment request, void the original check, and potentially create a replacement.

The process was slow and generated unnecessary administrative work.

K. Hovnanian began using Emburse Card where municipalities accepted card payments. Employees responsible for obtaining permits could pay when the need arose rather than estimating the exact amount and requesting a check in advance.

The cards also support the company’s design teams, which purchase furniture and other materials for model homes.

A designer may arrive at a store and realize an additional item is needed. With a check, the employee might have to make a second request and return later. With a card, the team can complete the approved purchase during the same visit.

“It eliminates the need to create a check request in advance,” Amador said. “You have the immediate ability to make the purchase, and it is automated after that.”

Card adoption is still expanding, and not every municipality accepts digital payments. But where cards can replace checks, the workflow is faster and easier for both AP and the field.

The field knows the invoice. AP knows the controls.

One of the biggest changes was not simply automation. It was clearer ownership.

K. Hovnanian has employees across construction sites, divisional offices, design teams, and corporate functions. Those employees often understand the purpose of an invoice better than a centralized clerk can.

Emburse lets that knowledge enter the process at its source.

Field employees can code or validate the invoices connected to their work. Compliance rules examine the information, and workflow rules route it through the required approval structure.

AP handles the smaller percentage of transactions that require judgment or correction.

OCR and automated capture are not perfect. A system may occasionally misinterpret text or identify the wrong name. But configurable rules, monitoring filters, and human review allow K. Hovnanian to correct those exceptions.

As the platform and its configurations improve, those exceptions represent a smaller share of the workload.

“You go from putting all the pressure on the AP team to having the people in the field who are experts on that invoice provide the information,” Amador said. “AP can concentrate on exception handling. It improves efficiency dramatically.”

A white-glove shared services organization

Centralization can sometimes make internal service feel more distant.

Amador wanted the opposite.

He describes AP as a hub for the business and emphasizes a white-glove approach to internal customer service. When an employee brings his team a question, AP owns the issue until it reaches the right person.

That approach builds trust with the divisions and helps the shared services team learn more about the business.

Automation supports that service model by giving employees the time to respond thoughtfully. Instead of spending the day retyping invoice details, they can investigate questions, communicate with vendors, and help division teams prevent recurring problems.

The result is a centralized AP function that is more standardized without becoming less human.

Change as a condition of progress

The transformation required sustained change management.

Amador had previously implemented financial platforms and worked in consulting, internal controls, and data analysis. He understood that employees rarely welcome a new process simply because it is more efficient on paper.

As the leader responsible for the transition, he focused on maintaining a positive culture and helping employees understand why their roles were changing.

“Change is inevitable, and progress means change,” he said. “If you are progressing, you are changing. Otherwise, you are staying behind.”

The team bought into that message.

Employees developed new analytical and customer-service skills. Shared services built credibility with the divisions. Processes that once required long days and large temporary teams became manageable within a more sustainable operating model.

For Amador, the difference is personal as well.

During the early period of centralization, he regularly worked ten- to twelve-hour days. Five years later, the organization operates with a more conventional workload.

Being able to leave the office at a reasonable time is a simple but meaningful measure of progress.

“It shows that we did something positive,” he said. “And I credit Emburse for a lot of that.”