Aged payables
Improvement in millions (£)
NHS Lincolnshire Integrated Care Board, Midlands, ICB (Integrated Care Board)
The problem
There was a planned merger of four organisations into one. The processing of invoices across the four organisations was not consistent and they had to be managed by one new team. This meant prompt payment wasn’t being achieved and the aged payables position was high. There were different types of care to consider, different teams, different ways of authorising and no contracts in place. Providers were threatening to leave the market. If providers are not paid on time, then cash flow problems can arise which leads to market failure, reputational risk and failure of agreed contract terms of payment.
The challenge
How might we standardise the aged payables process, improve the working life for members of the team, encourage staff retention and implement change for the new organisation?
The new team was looking to improve market stability and ultimately control the forecast outturn position. To move forward, we needed to ensure our current providers were being paid promptly to encourage future business.
The outputs
- There was a reduction in the aged payables value. The team has maintained a consistent reduction of 75% at the end of each month compared to the highest value at start of project. This is from £6.6m to £1.6m.
- There was a reduction in the aged payables volume. The team has maintained a consistent reduction of 65% at the end of each month compared to the highest volume at start of project. This is from 2000 invoices to 676.
- There was achievement of the team’s KPIs, for example a reduction in over 180 days old invoices below £50k has been achieved.
- There was a reduction in provider queries and complaints.
The outcomes
The outcomes are:
- staff turnover reduced
- team motivation improved
- there was an improved working relationship with the market
- there was an improved knowledge around the aged payables position for the team
- there was efficiency achieved in the team which meant focus could move to setting up new procurements for activity, which in turn helped improve long term market viability and control the forecast outturn.
The Innovation
Read the full innovation on aged payables
All the documents and resources relating to this innovation can be found in the downloads section at the bottom of the page.
Read nowWhat the peer-reviewers said
“Owned by the individuals in the team, which will enable transferable skills to other programmes of work.”
“Categorisation of issues allows recuring challenges to be identified and the root cause understood, with the potential to feed into procurement and contracting to ensure issues are avoided from the start of the relationship where possible.”
“Improvement in relationships with providers and standardising good practice across the team.”
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