If you are a Director of a UK business over a certain size you will be well aware of the new obligations on payment practices reporting. Broadly speaking if your organisation exceeds at least two of the following three thresholds then you will be required to report to the Department of Business on your supplier payment practices* going forward.
- £36 million annual turnover
- £18 million balance sheet total
- 250 employee
This new legislation is being put in place to help curb the late payment culture which cripples numerous businesses every year. Submissions are due after every six month period and company Directors will be criminally liable if the business fails to publish a report with the necessary information within the specified filing period of 30 days.
For companies with a December year end their first submissions will be due in July 2018 but it seems there are some organisations who are still not clear on the size and scale of the task.
Given the detail required it is likely to be a burdensome task for most and especially difficult for companies who have data spread across a number of different finance systems.
A common pain point is that payment dates are often not recorded meaning many companies have a laborious manual task on their hands. Some estimate this could be as much as two weeks' worth of work to complete each reporting cycle.
PEPCO has partnered with Xelix who provide a smart tool to automate this reporting. Xelix offer a suite of easy to implement, light-touch tools to support finance functions and deliver a material impact on a company's bottom line. Their payment reporting software has been designed to enable compliance without the need for cumbersome IT integration. There is no big ERP implementation required and the tool can usually be set up in around a week.
The Xelix system receives a feed of data from the purchase ledger and works by analysing the purchase ledger on a daily basis. It produces extremely accurate reports, and from a risk management perspective provides a clear audit trail to satisfy potential audits and spot checks.
The quick results, accurate reporting and low admin overhead of implementing the Xelix payment reporting software has attracted clients such as Jack Wills, Vow Europe, JC Decaux, and Martin Brower.
An added win for customers is that the tool offers extra functionality along with the legislation reporting benefits, such as invoice duplication detection and prevention, plus other key financial reporting that is often hard to access. Added features from the Xelix software are:
- Data integrity: Identifies ledger errors such as incorrect dates and duplicate invoices
- Supplier analytics: Detailed analytics on supplier procurement and payment performance
- Working capital modelling: Models the impact of extending or reducing terms to suppliers
Savvy finance teams are using Xelix to get to grips with the new duty to report on payment practices quickly and effortlessly AND enabling significant cost savings and bottom line improvements through the added functionality. In one instance within a month the tool had uncovered over £100k worth of duplicate invoicing, a worthy side benefit of compliance reporting!
If you would like to find out more about how the duty to report processes can be simplified or benefit from a free of charge audit to uncover invoice duplication losses please contact Mark Russell: 0203 008 7585 or firstname.lastname@example.org *Department for Business, Energy & Industrial Strategy - Duty to Report on Payment Practices and Performance, Oct 2017