Councils are committed to looking after their suppliers and making sure they are paid promptly, supporting growth and the regional economy. As we near the end of 2024, many suppliers are approaching their financial year-end too, but how do we make sure processes run efficiently when this period coincides with the Christmas and New Year holiday?

Many suppliers are finding it tough out there. Avoiding processing and payment delays is always important but we need to make sure suppliers, especially small and micro suppliers, aren’t left short for Christmas. There’s an opportunity to relieve some of their stress over the holiday period and make sure your own teams don’t return to overdue work and a host of supplier queries.

What can AP teams do now, and throughout the year, to encourage their colleagues to follow processes and help?

It’s important to remind colleagues of the key steps that support efficient invoice processing, whilst also explaining why they matter. Too many times, colleagues view these tasks as simply requests from finance, without understanding their importance in the buyer/supplier contract. Gaining colleague support is especially important for organisations offering early payment.

Here are our recommendations to gain support from colleagues.

Raise a Purchase Order before you buy

Even if you have a clear No PO, No Pay policy, there’s always a need to remind colleagues to raise a PO before they buy to avoid processing delays and to ensure the organisation understands its commitments.

When reminding colleagues of the process, explain why it matters.

• Raising a PO makes sure the correct approvals are in place and checks made to ensure the supplier is able to fulfil the request.
• The council is aware of the spend committed to this supplier and can account for it.
• Provides the supplier with certainty that they have the Council’s approval for the request.
• Being aware of the purchase makes it easier to deal with supplier queries.
• The supplier invoice can be matched to the PO, removing delays with approval
• Avoids administration and delays caused by Accounts Payable needing to chase information.
• Ultimately, need to be accountable for the public money you are spending.

Make sure suppliers include the correct information on their invoice

A No PO, No Pay policy and a reminder that invoices will be returned if not quoting a Purchase Order certainly encourages suppliers to quote the PO on their invoice. In addition, making sure the Purchase Order also includes the correct information regarding invoice submission will help avoid delays. To avoid suppliers sending invoices direct to other departments, remind them of the correct email address and who to contact in case of queries.

Receipt as soon as goods and services are delivered

No matter how sophisticated your finance solution and automated matching is, if colleagues don’t receipt in a timely manner, there will be delays to the process. In the case where items are paid without receipt, there’s a risk of paying a supplier when goods and services haven’t met the expected standard.

Remind colleagues to receipt goods and services as soon as they are delivered, and not to wait for the invoice to arrive.

• This enables invoices to be matched with POs and paid without additional administration – making life easier for the requisitioner and Accounts Payable teams.
• It lets Accounts Payable know if there is an issue or reason to only expect partial invoice/credit.
• Ensures suppliers are managed effectively if there are repeated issues in fulfilling the contract.

If you’re going to be away, delegate receipting

Even if you’re unable to receipt goods for a few days, receipting should be delegated to someone else. We remind colleagues to delegate receipting at the same time as they put their out of office on, to make sure the person they delegate to is available throughout the period of absence, and to explain to them the items which need to be receipted. The delegation process, however, is often misunderstood and AP teams need to check that their colleagues have access to clear instructions for the process to work.

• Do you have a manual or automatic process?
• Is there a set of readily available instructions on the intranet?
• Are your processes for raising POs, receipting, and delegation part of your induction for new starters?
• Do line managers know how to delegate receipting, to lead by example, and to delegate receipting on behalf of reports who are unexpectedly absent, such as on sick leave? Do line managers know they need to delegate receipting in these circumstances?

Ask suppliers to send their invoices early

The problem during national holidays, is that aren’t many people available to delegate to – everyone tends to take their leave at a similar time. That’s why it’s important to give suppliers the option to send invoices earlier, particularly for large expenses, and for small and micro suppliers who are likely to struggle to maintain cash flow.

Get Support from senior stakeholders and key advocates

To communicate the message effectively, you’ll need to be consistent and introduce a variety of reminders. Get senior stakeholders on board to help advocate best practice, to demonstrate the importance of the message, and to reinforce the message through line managers. There may be a need to pay particular attention to departments where issues arise repeatedly. Clearly sharing the message through a variety of methods, emails, newsletters, blog posts… can help explain the ‘why’ when asking colleagues for support.

Sharing best practice now, will not only help during the holiday period, but it will also put you in a good place ready for more stringent reporting of payment times from February

Working proactively with suppliers and colleagues as we approach the end of the year, can help spread a little more festive cheer, set good practices to last into the new year, and make the holiday period more enjoyable for everyone.

Clients of Oxygen have access to a wide range of materials to support this messaging. Ask your Client Service Manager for more details.