Starting the new year in the same vein as we left off in 2015, Oxygen is delighted to announce that we have been engaged by West Sussex County Council to implement and operate our early payment programme, to be branded by the council as its Supplier Advantage Initiative.
This marks the latest county council among Oxygen’s local authority clients, which also span city councils, unitaries and metropolitan boroughs the length and breadth of the country. West Sussex’s programme will push liquidity into the council’s supply chain, while simultaneously helping West Sussex to meet its ambitious savings targets. In parallel, the initiative helps the council in its continuing ambition to maintain best practice and capitalise on technology and innovation in order to constantly improve the efficiency and robustness of the council’s processes.
West Sussex’s Executive Director for Corporate Resources and Services, Peter Lewis, commented “We are delighted to be working with the market-leading provider, Oxygen Finance, to put in place the council’s Supplier Advantage Initiative and we’re confident that their proven experience of running successful programmes in the UK public sector will be crucial in ensuring our Supplier Advantage Initiative achieves its goals.”
The Oxygen programme has in its sights the council’s key priority of championing the West Sussex economy- a critical part of this being to ensure that the council’s extensive supplier base receives the support it needs, not just in terms of improved liquidity, but as part of an increasingly collaborative relationship, which seeks to increase the efficiency of the entire buyer/ supplier relationship and leverage this to address the council’s wider strategic economic objectives.
Oxygen is very much looking forward to working closely with West Sussex County Council for the benefit of the local authority’s suppliers and the council itself, in terms of achieving both further increases in process efficiency and, perhaps more importantly, tangible savings.”
As the festive season approaches, we’ve been looking back on some of the successes Oxygen has seen in 2015 and the opportunities we face in the year to come.
It’s been an incredible year for Oxygen, seeing tremendous growth and developments throughout the business, all in the midst of a market which is constantly developing, with the issues of prompt and early payment coming increasingly to the fore. We’ve seen phenomenal traction as Oxygen has consolidated its position as the premier provider of early payment solutions in the UK and in particular the continued roll-out amongst local authorities, forming our core market, now sees us with live clients the length and breadth of the country, from Croydon to Cumbria and Aberdeen to Warwickshire. Meanwhile, the results being realised by Oxygen clients also continue to smash all previous records!
– Higher rebate levels being established than ever before
– Still further advances in payment acceleration being achieved
– More value delivered to suppliers, with Oxygen clearing the milestone of 1,000 signed suppliers earlier in the year and, as ever, 100% of connected suppliers including 100% of their invoices in 100% of our programmes
– 5 consecutive record-breaking months of rebates generated by client programmes
The challenges facing the public and private sectors alike continue to grow, with budgets squeezed, the competitive environment still fierce and an ongoing need to improve operational efficiency and eke out new income streams, set against a backdrop of ever-tightening resource constraints. Oxygen’s offering has been well-received across the board for companies and local authorities looking to improve P2P efficiency, mitigate legislative compliance risks, improve CSR and supply chain stability and above all, generate a new income stream.
The environment here at Oxygen has also continued to change, with new faces popping up across the business. The supplier onboarding and delivery teams have been recruiting as we further build out our already extensive capability in those areas. In response to the growing number of clients in the North, we have established a regional office in Oldham- the location being ideal to support our clients in Oldham, Barnsley, Warrington, Cumbria and the North-East. We’ve welcomed a new Head of Sales to the team and his fresh perspective helping to strengthen our client engagements. Perhaps most importantly, Ben Jackson has recently taken the helm as CEO, already bringing in a suite of developments to hone the company’s strong performance.
The issues of late, prompt and early payment have seen a heightened profile during the course of the year, with central and local government coming to realise the important impact that payment performance can have on their supply chains and those of UK corporates. New legislation has now been introduced (effective February 2016) obligating buyers to report on their supplier payment performance. Failure to pay suppliers by due date now translates to a transparently disclosable liability which can reach into the millions, even for buyers with top-quartile payment performance. This has proved of enormous interest at the numerous customer events we have held, including this year’s LGA conference in Harrogate, where we found many in the audience were unfamiliar of the implications of non-compliance and therefore grateful for our enlightening presentations on the subject. Oxygen was pleased to be invited early in the year by Lord Young to Downing Street to explore innovative ways to improve working capital within the supplier community, while we took an active part in the Department for Business, Innovation and Skills’ Small Business Commissioner consultation this autumn, offering valuable insight into some of the nuances of early payment
Finally, in support of client programmes, we’ve made yet further investments in the Oxygen technology, extending beyond just the world-leading rebate automation platform underpinning all of our programmes. Much of this is behind the scenes, but our expanded performance analytics and improved user interface is actively supporting payment acceleration and best practice amongst our clients. Extended e-invoicing functionality has also strengthened our service, contributing further to clients’ P2P efficiency and additional reporting functionality renders Oxygen clients compliant with their new reporting obligations noted earlier
It’s been a busy, but hugely satisfying 2015 for us and we look forward to another fantastic year in 2016 as we continue to grow and develop the business, in close collaboration with the expanding family of Oxygen clients.
Merry Christmas and a happy new year from everyone at Oxygen!
In light of the new obligations and potential exposure due to the Prompt Payments Legislation, we invite you to join our webinar with Eversheds International Law Firm on Wednesday 16th December at 3pm (UK time).
The webinar will be hosted by Shaun Jamieson, Legal Director at Eversheds, and he will review the underlying policy and developing legislative framework, “to include the new procurement regulations” surrounding the requirements for prompt payment and the legal and practical consequences.
The key topics that will be covered in the 30 minute webinar include:
− Late payments legislative history
− Payment obligations
− Transparency obligations
− Consequences of failure to pay / late payment
− Practical steps
This is an unrivalled opportunity to learn more about the legislation, which is a key topic for the government and widely covered in the press. At the end of the webinar you will have a chance to ask some questions to Shaun, which will help you understand what you need to do to comply with the legislation.
Please email firstname.lastname@example.org if you would like to sign up to the Webinar.
Following on from the success of the Premier Supplier Programme delivered with the London Borough of Croydon, we are delighted to have now launched the London Borough of Bexley Supplier Incentive Programme (SIP), with the support of London Councils. The programme intends to pay participating suppliers invoices early and in doing so generate an additional saving for the Council through the deduction of a small rebate.
Suppliers who join the programme will see improvements to their cash flow and working capital as well as the opportunity to access a range of new services such as free e-invoicing, dedicated service contacts, account support, prioritised query resolution and increased visibility within the Council.
The Supplier Incentive Programme is a win-win solution for both the council and their suppliers, this will also provide opportunities for the Council and suppliers to work together on developing even better long-term solutions. The suppliers who choose not to join will continue to see the value of working with the Council and remain on their existing contracted payment terms.
“We are committed to supporting our business partners and this new business initiative will enable us to help Bexley’s supply chain.” Alison Griffin, Director of Finance
“Implementing the Supplier Incentive Programme will ensure that Bexley is super-efficient in our payment practices, which is good news for our suppliers and providers.” Councillor Don Massey, Cabinet Member for Finance and Corporate Services.
To find out more information about the Supplier Incentive Programme please visit www.bexley.gov.uk/sip
A new study published this month by The Forum of Private Business (FPB) has shown a ‘high degree of variation between the fastest and slowest paying councils’.
Whilst Local Authority payment performance has seen an improvement in the past 12 months, FPB managing director Ian Cass reported that “there are concerns that some councils are not able to report how many bills are paid in 30 days, which may indicate operational issues.”
Furthermore, the lobbying group has come out as being strongly in support of the EU Directive on late payments and has gone on record that the Government should agree to “faithfully transpose” it.
The integration of the EU Directive on Public Sector Procurement into UK law poses a potentially worrying challenge for Local Authorities with its legal requirement to open up payment performance reporting. Not only are public authorities being required to publish annually the number and value of invoices they have paid late, they will be forced to apply the financial penalties inherent within the Late Payment of Commercial Debts Act to calculate and report the late payment liabilities they “have, or should have” paid.
New estimates show that a typical upper tier Authority could be faced with an annual liability of between £300,000 and £750,000, unless they are able to comply with forthcoming changes in late payment legislation.
Read more about the issues and implications of the payment disclosure obligations facing Local Authorities in our white paper: Calling Time On Public Sector Late Payment.
Ben has most recently been COO at Oxygen, following a career in Procurement & Business Transformation. Previously Ben has worked internationally in Oil & Gas, Telecoms, Infrastructure and Logistics businesses, running enterprise transformation and modernisation programmes.
“I’m delighted to be CEO”, commented Ben, “It’s an exciting time for our business with existing clients obtaining ever improving results, whilst our more recent clients are taking advantage of our latest thinking and experience.
“When we started this business, the wider advantages of Early Payment Programmes were less understood, now we see widespread adoption of the techniques that we have pioneered. I look forward to driving the business forward and delivering results for our customers”.
Gareth has held senior executive roles in BT, Cable & Wireless and more recently Hansen Technologies. His background lies in Telecommunications and Technology having worked in Australia, France and the United Kingdom.
Gareth was attracted to Oxygen Finance due to the people and importantly, the innovative proposition the company has in its portfolio.
“I am excited about Oxygen’s unobtrusive cloud technology around the purchase-to-pay processes, where both buyer and supplier benefit. It’s definitely a ‘win/win’ solution – I like that!”, stated Gareth.
Gareth complements the current sales and marketing teams and is keen to capitalise on the tremendous growth the company has enjoyed, especially over the last 18 months.
We are delighted to report that Warwickshire County Council has now launched its new Premier Supplier Service (PSS) to key suppliers, who have welcomed the programme. Suppliers who sign up to the service will benefit from early payment of their invoices in exchange for a small percentage rebate on each invoice.
The Council, which is working with Oxygen Finance Ltd to manage the implementation of the Service, will benefit from improved processes. All funds generated through this programme will then be fed back into the day to day services on which the people of Warwickshire and local businesses rely.
Suppliers will see improvements to their cash flow and working capital and the opportunity to access a range of new services such as e-invoicing, dedicated service contacts, account support, prioritised query resolution and increased visibility within the Council.
The Premier Supplier Service will also provide opportunities for the Council and suppliers to work together on developing even better long-term solutions. The Premier Supplier Service is a voluntary initiative and suppliers who choose not to join will continue to see the value of working with the Council and remain on their existing contracted payment terms.
Cllr Alan Cockburn, Deputy Leader of the Council said “We are pleased to be offering the Premier Supplier Service to our suppliers to maintain positive business relationships. I recommend all key businesses that deal with the Council to sign up to the scheme and see the advantages of early payment.”
Cllr Matt Western, Chair of the Corporate Services Overview and Scrutiny Committee said “The Council’s key priorities are driving economic growth within the local community, seeking innovation and delivering resources in a more efficient manner which can all be achieved through encouraging suppliers to sign up to the Premier Supplier Service.”
To find out more information about the Premier Supplier Service, visit www.warwickshire.gov.uk/pss
Over the past two weeks, Phil Woolas has been travelling the country, from Brighton to Manchester, for the Labour and Conservative Party Conferences. We spoke to Phil to find out more…
Starting his journey in Brighton at the Labour Party Conference, Phil observed that Corbyn’s unique style and approach to politics had brought to the Labour Party Conference “a very different feel” from previous years. On his visit to Manchester, he referred to the Conservative Party Conference as an altogether more “business-like affair”.
Despite the contrasting styles and political differences of the two Parties, the sense was that both sets of delegates clearly expressed support for the policy to date in respect of the recent Enterprise Bill, as well as the introduction of the Small Business Commissioner. However, some SMEs in attendance expressed scepticism about the difference the new laws around late payment will actually make.
Overall, Phil was delighted to see a notable increase in awareness around the issue of late payment at both events: “It appears that this might be one area on which both parties can work together in order to benefit society”.
So with the political party conference season coming to a close, and the appointment of a Small Business Commissioner on the horizon, what will the biggest challenge be for the person selected for the role? Phil didn’t have to think about the answer to this question for long: “It will be to manage the raised expectations of the business community”, he said.
There appears to have been a great deal of media attention and political focus directed at this area and only time will tell how successful the implementation of these policies will be. So watch this space for regular updates and insights from Oxygen Finance.
The North-East branch of the Civil Engineering Contractors Association (CECA) held an event for its members on 6th October to discuss the importance of cash flow from a supplier’s viewpoint and to explore the funding alternatives available. The event followed a survey conducted by CECA North-East, which sought members’ views on payment-related issues.
The discussion, entitled ‘Cash Flow Chaos – Managing Your Money’, was kicked off by presentations from three invited subject-matter experts: Robert Moretti, CEO of Oxygen Finance Ltd; Sarah Wilson, a partner at law firm Watson Burton LLP; and Paul Brown, commercial credit consultant at trade credit insurer Euler Hermes.
Roberto set the scene by quoting Chris Dancer, Chairman CECA North East: “If the commercial bullying continues then the perpetrators will eventually fall on their own swords as specialist sub-contractors will pick and choose to work for the better payers.”
Roberto focussed on ways in which suppliers (both prime and sub) can preserve liquidity in the face of long payment terms imposed by large buyers or buyers paying later than the contracted terms. He outlined the dynamics of the market, the challenges faced by suppliers and examined the pros and cons of three market options: Factoring, Reverse Factoring / Supply Chain Finance and Dynamic Discounting.
Sarah Wilson provided an overview of the Construction Act Payment Scheme and outlined how to proceed if its principles were not followed, including adjudication, suspension or winding up. Sarah covered the strategies and tactics that can be deployed in not allowing the paying party to get away with systematic reductions from interim applications; in addition to late payment of certified sums.
Paul Brown looked at Trade Credit Insurance as a tool for growth, highlighting how it works and how to trade safely. Paul also provided insights into the structures available, the costs involved, and the importance of the role of Trade Credit Insurance in protecting receivables.
There followed a Q and A session, with the speakers forming an expert panel.
CECA North-East represents over 65 civil engineering companies of varying sizes in an area that encompasses more than 15 Unitary Authorities and three County Councils, stretching from the Scottish borders to the Dales and eastward.
They say money makes the world go round. But for SMEs in the UK today the system is becoming increasingly clogged. New research from the Asset Based Finance Association (ABFA) shows that SMEs are holding a staggering £67.4bn of outstanding invoices (and they believe this is a conservative estimate!) This figure is up 8% on last year, 30% on 2011. On average, an SME waits 72 days for payment, 11 days more than at the height of the recession in 2009.
Some argue that increasing turnover and a growing economy make the increase in late payment inevitable. But that will come as little comfort to struggling SMEs for whom those outstanding invoices can equate to as much as 14% of annual turnover. The government has said that the newly created position of Small Business Commissioner will focus heavily on the issue of late payment, but it may be some time before that starts to make a difference.
When research like this is published, the focus inevitably falls on those holding the unpaid invoices and the difficulties they face. What’s more, instead of looking at ways of speeding up payments, many commentators suggest that firms should see their unpaid invoices as leverage and use them to secure new funding.
Such a reaction might be understandable. But we need to see the issue in the round if we really want to solve it. Rather than focus on just one side of the problem, we need a balanced solution, one that gives an incentive to both buyers and suppliers.
At Oxygen, our two-way incentivised Early Payment Programme provides a complete solution: both sides of the transaction benefit. By agreeing a small percentage rebate, suppliers can see substantial improvements in cash flow by being paid earlier than contracted which, in turn, reduces reliance on credit facilities and protects working capital.
Buyers that introduce such a programme benefit from a new income stream and better relationships with their SME suppliers.
This strategic approach to payment, with significant benefits to both sides, has an increasingly important role to play in unblocking the flow of money through the system. In short, it accelerates liquidity to the SME sector and to the wider economy.