Corporate report

Prompt payment article

Published 15 July 2014

1. Prompt Payment Policy

Government is committed to making improvements to payment practices across the public and private sector with a particular focus on actions that support smaller businesses.

The Crown Commercial Service (CCS) is responsible for prompt payment policy for government and the public sector, and the Department for Business, Energy & Industrial Strategy (BEIS) is responsible for policy in the private sector.

1.1 The OISC supports the Central Government Prompt Payment policy commitment to pay 80% of undisputed and valid invoices within 5 days with the remainder paid in 30 days. Government departments are now required to report their performance against these payment targets on a quarterly basis on GOV.UK.

The OISC has approved this policy for payment of invoices and is committed to ensuring that the Office generally, and its Finance Team in particular, is aware of the contents of this policy and complies with it. This requires specifically that the OISC will:

a. pay suppliers promptly in line with government legislation and in compliance with the terms and conditions of the contract awarded

b. agree payment terms at the outset of a transaction and abide by those terms

c. not extend or alter payment terms without the prior agreement of all parties concerned including attempting to change payment terms retrospectively

d. where there is no contractual provision or other understanding, suppliers must be paid within 30 days of receipt of the goods or services, or the presentation of a valid invoice, whichever is the later

e. provide suppliers when requested with guidance on the OISC’s payment procedures

f. ensure that there is a system for dealing quickly and efficiently with disputes; and

g. advise suppliers in a timely manner when invoices or parts of invoices are contested by the OISC

1.2 The aim of this policy is to ensure that payments to the OISC suppliers are made without delay but with no reduction in the standard of financial control by the OISC.

1.3 The OISC is committed to paying correctly submitted invoices and has introduced Key Performance Indicators (KPIs) to ensure this happens. A correctly submitted invoice is one that:

• is delivered on time in accordance with the contract
• is for the correct sum
• is in respect of goods/services supplied or delivered to the required quality (or are expected to be at the required quality)
• includes the date, supplier name, contact details and bank details
• quotes the relevant purchase order reference (where used) and
• has been delivered to the nominated address below:

Finance Department
Office of the Immigration Services Commissioner
21 Bloomsbury Street
London WC1B 3HF

2. Procedures

2.1 In accordance with the aim of this policy, the OISC when procuring goods and services will:

a. make payment within the timescale as agreed in the contract;

b. advise the supplier of the OISC’s nominated address for the submission of invoices

2.2 On receipt of an invoice, the OISC Finance Team will log the invoice, and then forward it to the relevant OISC budget holder for authorisation who should do the following depending on the status of the invoice:

a. Undisputed Invoice: If the invoice is undisputed, they should return it authorised to the Finance Team within three working days of receipt.

b. Disputed Invoice: The supplier and the Finance Team should be informed by the relevant OISC budget holder as soon as possible that the invoice is disputed and the reason(s) why. Efforts should be made to resolve the matter. Disputed invoices should be marked by the budget holder on the back “LATE PAYMENT, DISPUTED INVOICE”, and the date of resolution. Once resolved the invoice should be passed to the Finance Team for payment.

c. Late Goods or Services: For invoices where some or all of the goods or services have not been provided according to the agreed delivery date, the back of the invoice should be marked by the budget holder “Late payment, awaiting goods”, and the date of receipt of the goods. The invoice should then be passed to the Finance Team for payment.

2.3 Invoices received for disputed and/or late goods or services should be held by the person with the relevant budget line until resolution or delivery. The Finance Team should be advised of the position by the person holding the relevant budget line whereupon they would register the invoice as outstanding.

If the invoice remains in dispute or the goods or services have not been fully delivered in accordance with the contract after 30 calendar days, written reasons for the delay must be given by the budget holder to the Finance Team.

3. Payment Methods

3.1 Payment to the OISC suppliers is usually made by BACS. Payment by Payable Orders (cheques) is used in exceptional circumstances where the supplier has specifically requested that method of payment and is a one-off payment.

3.2 BACS payments must be authorised by the Head of Finance and in her absence by one of the Senior Management Team (SMT) in line with the Government Banking Services (GBS) initiative.

4. Records

4.1 The Finance Team will maintain a permanent register of all invoices received listing:

a. the invoice number

b. the supplier

c. the date the invoice was received by the Finance Team

d. the date the invoice was paid

e. the period between receipt and payment and

f. if payment was sent after 30 calendar days, the reason(s) for the delay.

4.2 This data will also be included in the Finance Team’s KPIs and in the OISC’s Annual Report and other returns as necessary.

4.3 Government departments are now required to report their performance against these payment targets on a quarterly basis on GOV.UK. These new reporting requirements were announced in the Budget 2015.