Haringey Council creates a paperless purchase-to-pay workflow & automated invoicing process

In 2016, Haringey Council’s Marketing Communications Team initiated a project to significantly cut the time and cost of processing supplier payments, to minimise risk in this complex, repetitive process and to enhance satisfaction of clients and SME suppliers alike. Using Panacea Software they created a fully automated process to integrate with our workflow system.

The back-ground

As well as managing all strategic communications for the Council and some partnership organisations, their team is responsible for a high volume and range of essential, but low-cost work such as interpreting appointments, public notices, stationery and print.  The process to manage invoice payments was cumbersome and costly both in terms of time and money, given the vast volume of transactions required to fulfil this complex range of services.
The invoice payment process for Marketing and Communications in 2015-16 involved:

  • 5,536 invoices processed for payment of 9,076 orders
  • 20 minutes’ work per invoice:
    • Accounts Payable 
      • 4 minutes: Code and process invoice
    • Marketing Communications
      • 4 minutes:  Resolve supplier invoice queries 
      •  2 minutes:  Invoice approved by at least two approvers 
      • 10 minutes:  Review, check and reconcile invoice
  • £39,900 in staffing costs (hourly rates: £19.25 for officers and £46.84 for managers and approvers)
  • This time-consuming process was also complex for suppliers and resulted in slow (sometimes late) payment of undisputed invoices.

The vision

To streamline, simplify and reduce risk in the invoicing and supplier payment process while creating value in terms of time and money:

  1. Save time and money:
    • Eliminate the third party provider fees for charged for processing invoice payments
    • Cut the time spent by council officers on this process by at least 50%
    • Reduce the time and cost incurred by suppliers in invoicing and chasing payment
  2. Implement a paperless process with system-integrated checks to prevent payment of unauthorised or incorrect invoices
  3. Secure the best mix of quality and effectiveness for the least outlay (Government’s policy for Managing Public Money)
  4. Procure 25% of goods and services from SMEs and create an efficient process to minimise transactional costs carried by the Council and its providers (Government’s procurement policy)
  5. Pay undisputed invoices within 5-10 working days (Government’s Prompt Payment policy)

Sticking to the plan

The project had an impressive turnaround time of just six months, with Marketing Communications Team, Finance Department and Panacea Applications Limited partnering to deliver it seamlessly. 

Plan.png
 

Something to be proud of

The project delivered immediate and significant financial, service and operational benefits to the council and to our suppliers.  It has simplified our Purchase-to-Pay process, saved time and money, and minimised risk while making our workflow more effective, more efficient and more capable of meeting key government targets in relation to engaging SMEs and sole-traders who can deliver best value.

Since its launch in June 2016, the following achievements have been recorded:

Operational & Service Benefits

  • Much simpler, online process for all parties
  • 5,601 invoices checked, reconciled with 6,636 orders and paid
  • Prompt (5-10 day payment) on 95% of undisputed supplier invoices
 
  •  100% customers rated our team’s Job Management as Excellent/Good

Finance and Efficiency Benefits

1.    Saved time: A dramatic 80% reduction in administration time, allowing our skilled staff to focus on meeting core priorities and delivering exceptional customer service:

  • 267 days’ admin work cut in 10 months since June 16
  • Accounts Payable saved 53 days
  • Marketing Communications saved 214 days

2.    Saved money:

  • Completely eliminated processing fees from third party provider previously required to support the process
  • £41,774 saved in staffing costs for this process
  • Terrific value for money - net cost savings achieved since launch (excluding time saved for staff):
 

3.    Created a robust electronic process with system-integrated checks that greatly reduced risk by preventing payment of unauthorised, disputed or incorrect invoices

4.    Reduced administrative and staff overhead and outlay for invoice payment, allowing our team to employ businesses of all sizes as best placed to provide the optimum quality and effectiveness of service (Government’s policy for Managing Public Money)

5.    Transactional costs carried by the council and its suppliers have been minimised by the new paperless process, thereby enabling SMEs to compete for the services procured by our team (Government’s procurement policy)

6.    The integrated purchase-to-pay process automatically pays undisputed invoices within 5-10 working days (Government’s Prompt Payment policy)

What’s next?

This project has substantially reduced the complexity and cost of procuring and supplying services to both the council and our suppliers.  They partnered with colleagues and suppliers to create tremendous value for every team involved, by freeing up a huge amount of time spent on routine administrative tasks, and by greatly minimising overhead costs and risk in complex Purchase-to-Pay and Invoicing processes.
Going forward they’ll continue to use this paperless process for all supplier invoice management, and will receive one invoice per month for our language services with effect from May 2017, which will yield the following forecast savings:

Forecast Annual Savings

 

  They will continue to use the capacity this process has freed up for the Marketing, Communications, design and print team to focus on the council’s core strategic priorities.

Next on the cards is to replace the Framework Contract currently in place for the provision of the services they manage, with a Dynamic Purchasing System.  This requires no further software development and will create a completely integrated, paperless system right from supplier-evaluation, strategic planning and budgeting, through to service call-off, supplier payment and charging.

In addition they are working with our finance and procurement teams and the new Shared Digital team which is responsible for three boroughs including Haringey Council, to consider how this efficient process can be rolled out to achieve similar time and cost savings and release council’s funds and resources for our core services.

The success of this project has proven the appetite from colleagues, customers, partners and service providers to harness technology and innovation in order to make our processes more effective, more efficient and more capable of delivering best value and savings clearly measurable in both time and money.