Agenda item

[Darren Herries,Operational Manager, to present report on performance of payment to suppliers]

Lisa Taylor, Head of Service – The Hub, explained that this report is a follow up to a briefing paper on the payment performance within the Agresso finance system since being introduced. Head of Service explained that background to the changes.

Darren Herries, Payments Manager – The Hub, gave a brief overview of the legacy mainframe system that was used to manage payments to individuals and suppliers. Payment Manager detailed the range of difficulties with the using this system, for example delays in the payment of invoices to suppliers.

Payments Manager commented on the benefits to the Council following the implementation of Agresso system. Payments Manager commented that the current payment system was considered to be good and continuing to improve. Payments Manager explained that the service has been promoted to small firms who have been encouraged to change to an electronic payment system rather than cheques, which  take longer to process. The Agresso links the receipt to the invoice order which makes it possible to process payments  much quicker.

Payments Manager commented on the progress made since Agresso was introduced. Payments Manager explained 81 per cent of invoices are paid within 30 days. Furthermore, that during 2014/15 the Agresso system paid 150,000 invoices across 85,000 payment transaction, with a value of £360 million. Payment Manager explained that Sandwell MBC are interested in introducing a similar system.

Payments Manager commented that the service recently received an Excellence in Finance category award.  The award was made in recognition of the quantifiable savings and process improvements and in delivering value to the Council as a whole. Payments Manager explained that the service is currently taking stock about what has been learnt following the introduction of Agresso.  Payments Manager outlined other changes that have been introduced to the system and future plans for improving the service.

Head of Service – The Hub explained the work being done with suppliers about further changes that would deliver a better service. Payments Manager explained that the service is offering an advice workshop to local businesses on the Agresso and the benefits it would offer them if they moved to an electronic payment system.

The panel queried the reference in the report that 20 per cent of commercial suppliers do not have a valid email address and what was being done to reduce this figure further. Payments Manager commented on the benefits to businesses having an email contact such as a prompt payment. In addition, the change will reduce the costs to the Council in processing invoices and issuing cheques. The production of a cheque costs the Council £20. The panel discussed options for encouraging businesses to make the change.

Payments Manager explained that based on contract principles the Council must pay an invoice within 30 days of receipt. A supplier cannot be forced to change the invoice method and it will be long term challenge to make progress in this area. Payments Manager commented on the cash flow problems caused to small businesses due to the delay in receiving payment.

Head of Service – The Hub commented that supplier engagement was critical and the importance of two-way communication with businesses.

The panel queried the current Council performance on recovering payment owed by debtors for domiciliary services. The panel requested that a report be presented to the panel at a future meeting. The panel requested that a report include details on the impact on the number of debtors since the introduction the Agresso system.

The panel discussed the payment of invoices to school suppliers. Payments Manager explained that the Council has no control over how long invoices are held by the school suppliers and will process payments as quickly as possible.

The panel discussed the current policy about the use of purchase cards and restrictions on their use. Payments Manager that there is a restricted limit and category in the new system and there is work being done to reduce the numbers and amount spent on cards. Payments Manager explained the circumstances where a payment card would be used and also payments are analysed by procurement.

The panel queried the effectiveness of internet security and the Council’s firewall. Payments Manager explained the measures in place to protect the Agresso system from security threats..

The panel welcomed the report and the progress made.

Resolved:

The panel to receive a report on debt recovery at a future meeting.

The meeting ended at 19:32