Can you tell us a little about how Oxygen has developed over the past year?
A: Well it’s been busy, but we like it that way! The great news is that the huge effort the team has made is really paying off, in terms of tangible value for our clients. Clients the length and breadth of the UK and in the US are seeing hard savings and efficiencies in their P2P processes.
Q: That’s fantastic, so what developments are you seeing in the market place?
A: When Oxygen first came to market, whilst early payment was an accepted business practice, there were few providers offering industrialised solutions across the supply chain. The banks have historically offered Supply Chain Finance programmes and more recently some eInvoicing providers have begun to dip their toe into financial services. This increased buzz in the market really stands as testament to the great strides we and our clients made in the early years of Oxygen and bodes well for the future as we continue to strengthen our market-leading offering. The space we operate in is niche and requires expertise developed over years of accumulated experience- Oxygen’s head start allows us to bring the best supplier onboarding, change management and sophisticated technology to bear for our clients. Why? We don’t do anything else!
Q: With growing focus on late payments amongst the press, what’s your view on the situation?
A: I find it hard to reconcile the excellent performance that is publicly reported from both government and private sectors with the reports coming from suppliers and supplier groups. Clearly it’s important to compare apples with apples and buying organisations will naturally choose to report in a way that suits them e.g. calculating the due date from the point they’ve received and logged an invoice in their financial systems, whereas a supplier could reasonably expect the clock to start from the date on the invoice. You then overlay volume vs value and the headline reported performance can change again. What we do welcome is the legislation in both public and private sectors, which we hope will improve both performance and also transparency.
Q: So what’s next for Oxygen?
A: This is a fast moving space and whilst delivering excellent service, we also must move with the times. We see social value creation and corporate social responsibility as increasingly important drivers for buyers and as such we’re excited by the forthcoming launch of our £reepay solution at the Local Government Association annual conference in July. This new product is designed to get cash to those suppliers that need it most, for free – its the right thing to do!
To help make this happen, we’ve acquired Satago in the last 6 months- a business that has phenomenal technology that we will leverage to engage directly with small businesses who trade with large buyers. This will essentially allow them to issue invoices directly from their native accounting packages (Xero, Sage etc.) and electronically present them into the buyer’s financial systems. This circumvents the age-old problems of re-keying, scanning, OCR or electronic invoicing charges and brings a modern solution, enabled by amazing technology.
Q: You must be seeing a great deal of interest in Oxygen’s Early Payment Programmes?
A: It is still a very fragmented and nascent marketplace. As providers, we are working hard to articulate the differences between Supply Chain Finance, Dynamic Discounting, Factoring, Invoice Financing, Early Payment Programmes and Working Capital Programmes. What I say to prospective buyers is they need to start by understanding what the outcome is that their business and their suppliers want, be it P&L Impact, Balance Sheet Improvement, P2P Effectiveness or corporate social value – these are all on the table! Then talk to us, the vendors, but ask the hard questions:
– Can we talk to a client that has generated the income you’re forecasting in the business case?
– How many clients do you have that are live today, who we can reference?
– How many suppliers have you actually onboarded yourselves?
– Are they being paid consistently early across all their invoices, or just a small selection?
– What is the level of payment acceleration being achieved across all the clients you work with?
– What level of resourcing and expertise will you devote to implementing and running our Early Payment Programme?
– How long will it take to get a programme like this up and running?
– Does your technology offer more than simple dynamic discounting functionality, to meet the needs more sophisticated suppliers?
– Can you demonstrate HMRC VAT and CIS compliance?
– Can you offer dashboards and analytics, not just to demonstrate programme results, but to improve underlying P2P performance?