Prompt Payment

Prompt Payment PowerPoint PPT Presentation


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Summary. Prompt payment in context What the Highways Agency is already doingOGC Fair Payment InitiativeSupplier payment performanceNext steps. Prompt payment in context. Government and OGC has been championing fair/prompt payment of suppliers for a number of years (see next slides)Even greater focus:Economic downturnMore measurementEnsuring payment benefits are realised by the entire supply chain.

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Prompt Payment

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1. Prompt Payment Tom Hill Supply Chain Manager Procurement – Strategy and Supplier Development Team

2. Summary Prompt payment in context What the Highways Agency is already doing OGC Fair Payment Initiative Supplier payment performance Next steps

3. Prompt payment in context Government and OGC has been championing fair/prompt payment of suppliers for a number of years (see next slides) Even greater focus: Economic downturn More measurement Ensuring payment benefits are realised by the entire supply chain

4. What the Highways Agency is already doing – direct suppliers Wider Government Prompt Payment Initiative Pay all invoices within 30 (10) days of receipt Currently paying around 70% of invoices within 10 days

5. What the Highways Agency is already doing – supply chain Fair Payment Charter Signed for all contracts awarded since Jan 2008 Non-contractual requirement to pay sub-suppliers within 30 days Based on OGC template Contractual terms MAC holds contractual requirement for payment within 30 days Project Bank Accounts Trialling in Major Projects

6. OGC Fair Payment Initiative Long running initiative by OGC (Jan 08) Again, promoting prompt and fair payment to all levels of supply chain Refreshed in 2010 with intention to: Move to Fair Payment Charter commitments to contractual requirements -(Mandatory contractual requirement for 30 day payment to sub-suppliers) Better monitoring of payment performance Wider use of PBAs

7. Supplier Payment Performance December 2009 – Agency wrote to all key suppliers and ask they complete a Prompt Payment Survey Results illustrated mixed payment performance Generally: Poor payment within 30 day terms (both actual payment and contractual terms with sub-suppliers) Little or no payment within 10 day terms

8. Next steps Agency is already working closely with OGC (Mike Bennett and Keith Austin) Contractual sub-supplier prompt payment clauses will become the norm Increased performance monitoring via MST (potentially an industry standard KPI) and wider OGC surveys

9. Summary Prompt payment in context What the Highways Agency is already doing OGC Fair Payment Initiative Supplier payment performance Next steps

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