Oxygen’s Chief Operating Officer, Clive Boddington, comments on the newly released PPN05/21 and explains how moving focus away from traditional payment approaches can support both the buyer and their suppliers.
It is promising to see PPN05/21, released this month by HM Government, highlighting the impact and importance of payment terms and payment mechanisms. Managed correctly this will support the UK economic recovery post Covid-19.
Point 19 of the National Procurement Policy Statement states that ‘the approach to pricing and payment goes hand in hand with risk allocation and should similarly be subject to consideration and scrutiny to ensure it incentivises the desired behaviours or outcomes’.
Oxygen Finance has been at the forefront of progressive payment practices in the UK, supporting public bodies since 2012 and throughout the Covid-19 pandemic. Early payment programmes streamline our client’s Accounts Payable processes and offer suppliers the choice to receive early payment.
Clive Boddington, Chief Operating Officer at Oxygen Finance, explains how moving focus away from traditional payment approaches can support both the buyer and their suppliers:
“By taking another look at how payment terms are incorporated and assessed within the tender process, it allows suppliers to evaluate the value of cash to their organisations. Where a supplier sees a benefit in early payment then this puts commercial pressure on the buyer to ensure that the P2P process is effective, encouraging best practice and the benefits that it brings over and above the value for money for the service being delivered.
Supporting suppliers to the public sector with improved liquidity provides greater financial stability for the whole supply chain.”
Oxygen Finance has significant experience in creating flexible models for assessing variable payment terms within the tender process, including the consideration of specialist categories such as care and construction, the tiering of suppliers, and those utilising procurement vehicles such as frameworks and dynamic purchasing systems.
The key impacts of the paper will be discussed at a CPO Forum on 15th July 2021 facilitated by Oxygen Finance to bring Chief Procurement Officers in the Public Sector together to discuss key issues impacting public procurement, specifically around payment practices.
Oxygen Finance is the leading Early Payment provider in the UK to the public sector and transacts circa £20bn across its infrastructure annually.