Automate to achieve the government’s five day payment target
If 10-day payment terms seem tight, how about meeting your supplier’s invoice demands in five days?
As outlined in the previous blog posting, the UK government has created guidelines to help public sector organisations pay their contractors in a timely fashion – and those guidelines just got tougher.
Following the recent budget announcement, all central government departments are now required to pay 80% of all undisputed invoices within five days (see further reading, below). The target – although tight and considerably less than the standard invoice terms of 30 days – is more than achievable.
The success of certain trailblazing authorities shows that the target can become a means for ensuring public sector best practice, helping to smooth interaction and collaboration between councils and contractors. The key to achieving such best practice is automation.
More than just a nice-to-have objective, all 22 central government departments will be required to collate and report five-day payment performance from May 2010.
Central government organisations will also be expected to explore the option of moving to immediate payment through electronic invoicing for all suppliers. Such aims create a strong business case for government organisations that are wishing to implement electronic purchase-to-pay (P2P) processes.
Without automation, there is simply no way that public sector bodies will be able to meet ever-reducing payment targets. The onus, then, is on public sector FDs and IT leaders to automate timely payment – and there are a host of available technologies that can help push such a transformation.
Scanning purchase invoices and capturing the invoice data electronically can significantly reduce the time associated with manual processing. The documents held electronically can then be circulated quickly for authorisation and retrieved as required, allowing swift approval and high purchase-to-pay efficiency.
Such automation highlights how there really is no excuse for public sector organisations failing to demonstrate sympathy with wider government payment objectives. Faster, automated payments will help your organisation prove it is one step ahead of equivalent organisations in the enterprise sector.
And more than just a means to faster payment in a recession, automated P2P systems will help your organisation work more effectively and productively in the long term.
Further reading
http://www.ogc.gov.uk/whats_new_budget_2010.asp
