NHS Wales is embarking on an innovative early payment programme for its suppliers, which will create an additional income stream for the Health Boards and Trusts across Wales to reinvest in essential services and help it achieve greater efficiencies through a more effective purchasing process.
The organisations, which provide care to 3 million patients and employs more than 72,000 staff, is working with leading early payment provider, Oxygen Finance, to improve its purchase to pay (P2P) solution, as part of a wider efficiency drive.
Through the implementation of new payment technology and more effective processes, the programme will offer suppliers early settlement of their invoices in exchange for a discount directly proportional to how quickly the payment is made.
NHS Wales has an annual spend of over £4 billion on goods and services and the Early Payment Programme is projected to deliver savings of circa £9 million over the contract period, alongside a myriad of further benefits down the supply chain.
Russell Ward, Head of Accounts Payable and eEnablement at NHS Wales Shared Services Partnership, said: “We see this as a win-win scenario. The programme will not only open up a welcome new income stream, but crucially allows us to develop better relationships with suppliers and vastly improved efficiency across our procurement systems.”
As part of the programme, Oxygen Finance will be delivering a comprehensive package of support to include expert process and change consultancy, a dedicated team to bring suppliers onboard and secure technology, integrated with the health authorities’ existing ERP system, so that transactions can be processed without intervention.
Ben Jackson, chief executive of Oxygen Finance added: “Our approach to early payment has proved to be hugely successful for our local authority clients and it is an exciting prospect to take this into the healthcare arena. We work collaboratively, embedding ourselves in our client’s organisation, working closely with their finance and procurement teams as well as suppliers, to ensure maximum return.”
NHS Wales is one of many public sector organisations already working with Oxygen Finance to unlock value from their procurement processes, including Barnsley Metropolitan Borough, Cumbria, Oldham and South Tyneside councils. Typically, upwards of 50% of suppliers participate, and a significant proportion of those are enjoying their invoices being settled on or around day 8 after invoice date (around 20 days earlier than standard contracted terms).