With ongoing government cuts, councils are increasingly recognising the opportunities available to them from implementing an early payment programme and Heads of Procurement are being asked to evaluate whether to draw on the expertise of an outside provider or rely on internal resource.
Procurement heavyweight Terry Brewer has evaluated in detail the viability of implementing an early payment programme both through a self-build route and by partnering with a specialist early payment provider. Here Terry offers his own valuable insights into 6 key considerations that councils face when making this choice.
A focus on value
In its simplest form, an early payment programme is just a means to capture the early payment discounts or rebates already being offered proactively by your suppliers. But there’s a lot more on the table…
- Streamlining purchase-to-pay (P2P) makes councils more efficient and reduces the risk of late payment penalties under updated legislation. Done alongside an early payment programme, this offers an opportunity to expand the level of rebates that can be generated, by accelerating invoice approval times without forgoing control
- But why stop there? We all know that cash is king for your supply chain and hundreds of your suppliers would value early payment. Proactively engaging with suppliers to offer early payment across your supply chain yields a step change in the level of rebates that the council can realise and maximises social value creation
- Manual calculations can be onerous, even when reconciling a low volume of early payment rebates. Leveraging technology to automate and manage the rebate process can both free up staff time and deliver valuable insight into P2P performance that supercharges the drive for process improvement
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