supplier incentive programme - oxygen finance · 2018. 7. 16. · 606354 supplier incentive...

Listening to you, working for you www.bexley.gov.uk

Supplier Incentive ProgrammeA GUIDE FOR SUPPLIERS

606354 Supplier Incentive Programme A4 Brochure.indd 2 06/11/2015 14:45:29

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Danson House, Danson Park


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1 S U P P L I E R I N C E N T I V E P R O G R A M M E I A G U I D E F O R S U P P L I E R S

Welcome to theSupplier Incentive Programme

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This programme is a

win-win. Businesses

get paid quicker and

the Council generates

an income stream that

helps us protect the

delivery of frontline

services to residents

Councillor Teresa O’Neill OBE Leader of the Council

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”

Following on from the success of the London Council’s backed Premier Supplier Programme in the London Borough of Croydon, Bexley Council has been working hard to introduce its own Supplier Incentive Programme.

We are committed to developing our approach to working with key suppliers and, as part of this, we have undertaken an in-depth analysis of our purchase-to-pay process and are seeking to optimise our supplier base.

A key objective of the Supplier Incentive Programme (SIP) is to improve the ordering, invoice management and payment processes for the benefit of all parties.

We believe the SIP delivers a win-win outcome, with the following key benefits to the Council’s suppliers:

l Improved cash flow through the early payment of invoices

l Reduced payment volatility – suppliers will be paid faster and more consistently

l Increased efficiency through our simple to use e-invoicing solution, prioritised invoice processing and dedicated query resolution

l Closer collaboration and an improved long-term relationship

l Enhanced client satisfaction and increased visibility within the Council

l Improved financial metrics


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S U P P L I E R I N C E N T I V E P R O G R A M M E I A G U I D E F O R S U P P L I E R S

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Alison Griffin Director of Finance

We are committed

to supporting our

business partners

and this new initiative

will enable us to help

Bexley’s supply chain

KeyFeatures

Free and simple to use e-invoicing

This tool is free to use and will bring the following benefits to suppliers:

l Reduced invoicing cost

l Assured timely delivery of invoices to the right place so they are visible

l Avoids the risk of human error

Prioritised invoice processing

As a member of the SIP your invoices will be processed on a fast-track basis. The SIP introduces a transparent and visible incentive for processing all SIP invoices as quickly as possible, ensuring faster and more consistent payment is delivered and maintained.

Dedicated accounts payable mailbox and contact

SIP suppliers will receive dedicated email and telephone contact details within our Accounts Payable department to ensure your invoices are processed correctly and any queries are pro-actively resolved.


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1 S U P P L I E R I N C E N T I V E P R O G R A M M E I A G U I D E F O R S U P P L I E R S 5

Implementing the

Supplier Incentive

Programme will

ensure that Bexley is

super-efficient in our

payment practices,

which is good news

for our suppliers

and providers

Councillor Don Massey Cabinet Member for Finance and Corporate Services

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”

KeyFeatures

Increased visibility and promotion within the Council

Bexley Council are responsible for many of the key services that are important to local communities such as schools, refuse, recycling collection, highways maintenance, social care and much more.

Suppliers that are part of the SIP will receive recognition of this on our public website, leading to increased visibility with stakeholders both inside and outside the Borough.

Supplier Testimonials

As a SIP supplier there are opportunities to provide testimonials of your experience of the programme which we may use in our marketing materials. This will give you the opportunity to increase your company’s exposure within Bexley. We would be happy to discuss any proposal with you.


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S U P P L I E R I N C E N T I V E P R O G R A M M E I A G U I D E F O R S U P P L I E R S

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Tom Brown Acting Director Adult Social Care

This new Programme

will allow us to

develop even better

relationships with the

people we do business

with, and increase

efficiency

Key BenefitsFor Suppliers

l Improved cash flow through the early payment of invoices

l Reduced payment volatility – suppliers will be paid faster and more consistently

l Increased efficiency through our simple to use e-invoicing solution, prioritised invoice processing and dedicated query resolution

l Closer collaboration and an improved long-term relationship

l Enhanced client satisfaction and increased visibility within the Council

l Improved financial metrics

For the Council

l Innovative solution that generates value from an ongoing purchasing requirement in order to help protect front line services

l Makes it easier for our suppliers to do business with us

l Opportunity to better understand and manage our large supplier base

l Commitment to drive end-to-end process efficiency and reduce cost

l Opportunity to use our working capital to support suppliers

l Minimise the reporting and financial risk associated with new payments legislation requirements


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1 S U P P L I E R I N C E N T I V E P R O G R A M M E I A G U I D E F O R S U P P L I E R S

£K£200K£400K£600K£800K

£1000K£1200K£1400K£1600K£1800K

Supplier's Account Receivable - Programme vs Terms

Terms Programme

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S T

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KeyBenefitsFaster and more consistent payment performance

l A common problem that suppliers experience is a payment performance which varies from month-to-month. This uncertainty is difficult to manage

l Central to the SIP is a significant purchase-to-pay investment which enables the Council to process invoices faster and pay suppliers more quickly

l Transparent incentives constantly drive invoice acceleration to deliver faster payment with reduced volatility

A reduced Accounts Receivable position with the Council means that:

l Outstanding work-in-progress balances reduce as your invoices are settled more quickly

l Less cash is tied up in your trading relationship with the Council, reducing your risk

FUTUREHISTORY

Q1 Q2 Q3 Q4

TIME


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Participatingin the Programme

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As a member of the SIP, your invoices will be processed and paid on a priority basis rather than waiting for the contractual due date.

How does it work? As a result of improvements made to our payment process, we are able to pay your invoices early. In return for paying you ahead of your pre-existing terms, a small rebate is deducted.

The rebate is calculated dynamically and is proportionate to the number of days we accelerate your payment (the number of elapsed days between the receipt of your invoice and the date it is paid). The rebate is only applied if payment is made ahead of terms. No acceleration, no rebate.

I look forward

to seeing the

long-term benefits

of this programme,

and the range of

advantages it brings

Paul Moore Acting Chief Executive

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X%

EP

R%

Target Rebate %

Invoice Receipt

Target Payment

Day

Terms Date

Acceleration

Agreed Max Rebate %


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How will the early payment impact the invoice generation process?

There is no change to the way you generate your invoices. The Council will calculate the early payment rebate and deduct this from the invoice amount. Along with the payment, the Council will issue a debit note to the value of the early payment rebate.

How will the early payment impact the invoice submission process?

E-invoicing is provided free of charge to all SIP suppliers. To enable the Council to process your invoices effectively and to pay early, you will be required to email invoices in a machine readable format.

Is there a purchase order policy?

The Council already operate a ‘no purchase order, no pay policy’. In addition to the multiple compliance benefits, this policy helps speed up the invoice approval process. Quote the PO number on your invoices for efficient handling. Failure to quote the correct number will result in delays in the processing of your invoice.

Will my existing contracted terms and conditions change?

The terms and conditions for the SIP vary the payment terms applied to your contracts. In all other respects, your contracts remain in full force and effect.

How can I be sure you will charge the correct rebate?

The process will be transparent and the relevant information (the percentage fee and the number of days your payment has been accelerated) will be printed on the debit note so that your finance function can validate all calculations.

How will the SIP impact the payment process?

You will be paid automatically by the Council as soon as an invoice has been authorised rather than waiting for the contracted payment due date. If no early payment rebate is available when the invoice has been authorised, payment will be made in accordance with your pre-existing contracted terms.

Frequently asked questions

”606354 Supplier Incentive Programme A4 Brochure.indd 10 06/11/2015 14:45:39

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How much will it cost to join?

There are no service charges, joining fees or hidden charges. The only fee you pay to participate in the service is the agreed early payment rebate. In return for paying you ahead of contracted terms, the Council will apply a rebate which will be deducted at an individual invoice level. The rebate is entirely dynamic, driven by the exact acceleration achieved on each invoice.

What happens if I don’t want to join?

The SIP is a voluntary initiative. Suppliers who elect not to participate will continue to submit invoices as they currently do, and will remain on their existing contract payment terms. If these are not 30 days they will migrate to 30 days as part of future contracts and renewals. Going forward all payments to the non-participating suppliers will be made on the contracted terms and not before. All invoice submission and query processes remain unchanged for suppliers who don’t join the programme.

Frequently asked questions

The Cob, Belvedere


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London Ventures

London Ventures is a new programme for bringing innovation to the public sector to improve outcomes for Londoners, and help the public sector to meet changing and growing customer demands at lower costs.

London Ventures is a partnership between EY and London Councils, the umbrella body for London local government, and is overseen by the Capital Ambition Board – which provided the investment to set up the infrastructure and initiate this pioneering programme.

London Ventures is designed to bring together private sector companies, investors and local authorities to enhance innovation and cost effectiveness in delivery of the capital’s public services – ultimately becoming financially self-sustaining to enable a continuous cycle of innovation in public services.

The Supplier Incentive Programme is a product of our collaboration with Oxygen Finance which is designed to benefit both local authorities and suppliers to the public sector. Suppliers can benefit from early payment of invoices in return for pre-determined rebates paid to the authority. The aim is to embed best practice, generate financial and social value and increase efficiency.

London Councils, through the London Ventures partnership is raising awareness of this Venture to London’s local authorities, with the desire to see more boroughs joining the Supplier Incentive Programme, which will improve supply chain relationships across the capital.

For more information please visit the London Councils or EY London Ventures website:

Key Contacts Programme enquiries:

[email protected]

Phone number: 020 8819 2121

www.londoncouncils.gov.uk

www.ey.com/UK/en/Industries/Government---Public-Sector/EY-london-ventures

www.oxygen-finance.com


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Listening to you, working for you www.bexley.gov.uk


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supplier incentive programme - oxygen finance · 2018. 7. 16. · 606354 supplier incentive...

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