NYCC – like other councils – has been under pressure to pay creditors promptly as part of the central government Comprehensive Performance Assessment.
But despite its best efforts to streamline its paper-based system, it was only able to pay 90% of invoices within the 30-day target.
Last month, the council went live with an electronic invoicing system, designed to automate much of the process, and help the council meet the CPA targets.
‘The invoicing system was 30 years old, harking back to the days of the first mainframes, so we thought we should be able to make the final push towards the 30-day target using electronic invoices,’ said John Burrows, head of central finance, NYCC.
When the new system receives an electronic invoice, it generates an email notification sent to the council staff, which need to approve the invoice.
Once the items listed have been checked the invoice is then forwarded to the council’s Oracle account payable system, which can then issue payments.
Despite speeding up payment times, not all suppliers have welcomed the system, with some complaining about the costs involved, said Burrows.
‘The intention is to pay all our suppliers this way. We can’t say how long that will take, but we’re starting to incorporate it into new contracts,’ said Burrows.
The system uses an electronic invoice network supplied by Open Business Exchange, and requires suppliers to either pay a membership fee. For suppliers with large numbers of transactions with the council, this can be up to £600 per year.
‘But we’re happy for them to factor costs into the tendering process, so suppliers shouldn’t lose out,’ said Burrows.
The system reduced postage and printing costs, as well as speeding payments, Burrows added.
The council also hopes to use the information from the electronic invoices to help it pinpoint where it spends its money, and identify the best performing suppliers.
‘Currently this is all locked away in paper records. Getting an overall picture of spending is a mammoth task,’ said Burrows.
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