Management of Receivables and Payables

Version 3.0 April 2017

Management of Receivables and Payables

Target Audience

Who Should Read This Policy

All Corporate Finance Staff

Management of Receivables and Payables Policy


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Ref. Contents Page

1.0 Introduction 4

2.0 Purpose 4

3.0 Objectives 4

4.0 Receivables Management 4

5.0 Payables Management 7

6.0 Procedures connected to this policy 12

7.0 Links to Legislation, National Standards, Policies and References 12

8.0 Roles and Responsibilities for this policy 14

9.0 Training 15

10.0 Equality Impact Assessment 15

11.0 Data Protection Act and Freedom of Information Act 15

12.0 Monitoring the policy is working in practice 16

Appendices

1.0 Credit Control – Flowchart for Shared Business Services (SBS) Customers

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2.0 Credit Control - Flowchart for Non-SBS Customers 19

3.0 Credit Control - Flowchart for When no response is received 20

4.0 Credit Control - Process 21

5.0 Credit Control - Example Letter 22

6.0 Example of Monthly Key Performance Indicators Report 23

7.0 Bad Debt Write-off Flowchart - NHS & Councils 24

8.0 Bad Debt Write-off Flowchart - except for NHS & Councils 25

9.0 Invoices with a Purchase Order Flowchart 26

10.0 Invoices without a Purchase Order Flowchart 27



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Explanation of terms used in this policy

Receivables - Accounts receivable are amounts the Trust has a right to collect because it sold goods or services on credit to a customer. Accounts receivable are assets.

Payables - Accounts payable are amounts the Trust owes because it purchased goods or services on credit from a supplier or vendor. Accounts payable are liabilities.

Purchase Ledger Management - a system in accountancy by which a business records and

monitors its creditors. The purchase ledger contains the individual accounts of suppliers from whom the business has made purchases on credit. Information on invoices and credit notes received, and

payments made, are recorded in the supplier's account using the debits and credits system, with the

balance of each account at a given moment representing the amount currently owed to that supplier. Historically, the purchase ledger was maintained in book form, hence the term ledger, but in modern

practice it is held on computer using accountancy software or a spreadsheet.

Credit Control - the system used by a business to make certain that it gives credit only to customers

who are able to pay, and that customers pay on time. Credit control is part of the financial controls that are employed by businesses to ensure that once sales are made they are realised as cash or

liquid resources.

Key Performance Indicators (KPIs) - have become the standard term for different sets of metrics

that organisations use to define and measure progress towards organisational goals and objectives

VAT (value-added tax) - is a tax on spending on goods and services. From the perspective of the buyer, it is a tax on the purchase price. From that of the seller, it is a tax only on the value added to a

product, material, or service.

Shared Business Services - NHS Shared Business Services is the largest provider of business

support services to the NHS in England involving over a third of NHS Trusts and 100% of NHS Commissioning organisations, accounting for around £100 billion of NHS spend.

NHSLA - NHS Litigation Authority was established in 1995 as a Special Health Authority that provides

indemnity cover for legal claims against the NHS, share lessons from claims and provides other legal

and professional services.

Policy - sets out the aims and principles under which services, groups, or units will operate. A policy outlines roles and responsibilities, defines the scope of the subject covered, and provides a high level

description of the controls that must be in place to ensure compliance. Procedural Documents - the collective term for policies, procedures or guidelines.

http://www.accountingcoach.com/blog/what-is-accounts-receivable

http://www.accountingcoach.com/blog/what-is-an-account-payable

http://www.accountingcoach.com/blog/what-is-a-credit

http://www.accountingcoach.com/blog/what-is-a-vendor

http://www.accountingcoach.com/blog/what-is-a-liability

https://en.wikipedia.org/wiki/Accountancy

https://en.wikipedia.org/wiki/Creditor

https://en.wikipedia.org/wiki/Credit_(finance)

https://en.wikipedia.org/wiki/Invoice

https://en.wikipedia.org/wiki/Credit_note

https://en.wikipedia.org/wiki/Debits_and_credits

https://en.wikipedia.org/wiki/Balance_(accounting)

https://en.wikipedia.org/wiki/Ledger

https://en.wikipedia.org/wiki/Accounting_software

https://en.wikipedia.org/wiki/Spreadsheet

https://en.wikipedia.org/wiki/Tax

https://en.wikipedia.org/wiki/Value_added



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1.0 Introduction NHS organisations are expected to operate in a climate of strong corporate governance and to ensure that public monies are used efficiently and effectively. Robust cash management is a key component for Black Country Partnership NHS Foundation to ensure services are able to run smoothly and deliver high quality care to the local communities it serves. Key to this is an effective credit control and purchase ledger process over the collection and payment of invoiced debt. Cash collection has a direct impact on the ability of the organisation to meet its financial liabilities. An effective credit control policy will reduce the value of aged debt and ease recoverability. An effective purchase ledger policy will ensure that invoices are real and are paid promptly. 2.0 Purpose The main aim of this procedural document is to outline the Trust’s policy on cash management within the organisation. 3.0 Objectives

The Trust recognises the important role it plays within the local economy and is committed to paying its suppliers on time

To provide accurate cash forecasts

To ensure the availability of adequate levels of funding at all times

To identify and manage the financial risks associated with holding insufficient, or excessive cash balances, and with insufficient or excessive projected cash balances

To ensure all cash transactions are adequately documented and authorised 4.0 Receivables Management 4.1 Invoicing 4.1.1 New Customers Requests for new customers should be accompanied with relevant address, telephone number, contact name and email details. Contract customers are encouraged to set up a bank mandate for ease and reliability of cash collection on 15th of a month for ease of credit control allocation. New customer accounts are created in the sales ledger using a unique identifier. 4.1.2 Raising of Invoices Management Accounts will requisition an invoice for services provided using a standard template. Invoice requisitions should be raised promptly and once a service has been provided, or in accordance with contract terms. Supporting documentation for the invoiced amount should be provided. Requisitions are automatically rejected if a customer name is not included. Invoice requisitions are to be approved by the relevant Band 7 member of the Finance team prompted by an email request. These are to be redirected in the event of staff absence. The approval should ensure that all customer details are provided and that invoice details are complete, accurate and fully supported. All invoice requests should contain customer contact names and contact details. An invoice will not be raised without this information.



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Approved requisitions are emailed to the Financial Services team who will then post the invoices onto the sales ledger, and issue them to the customer. Invoices are dated with the invoice requisition date, and include all payment details. If an invoice request is less than £100 it should be approved by the Financial Controller. Unapproved requests should be logged separately and reviewed on a monthly basis to determine whether a grouped invoice could be issued to specific customers. All invoice requests will be invoiced within 3 months. 4.1.3 Contract Invoices Invoices should be raised by the 5th working day of the period that it relates to. Where contracts have specific payment terms then these should be incorporated on to the invoice and in no circumstances should exceed the standard payment terms of BCPFT which is 30 days. 4.1.4 Non-Contracted Activity (NCA) Invoices Information with regards to NCA for the previous month is received by the 12th working day of the month. Therefore invoices should be raised by the 20th working day. Where an invoice exceeds £20k a contract should be put in place through the contracting team. 4.1.5 VAT VAT should not be charged on NHS invoices. All non-NHS invoices should include VAT at 20%. The VAT element is coded to a specific nominal ledger code to ensure that it is offset against the VAT recoverable amount due on purchase invoices. If a non-NHS customer can provide evidence that they are exempt from VAT then this should be filed and flagged against the relevant sales ledger account and the invoices raised should not include VAT. 4.1.6 Accrued Income Income should not be accrued unless there is a specific reason. This should be logged. Accrued income must be invoiced in the subsequent month where applicable. The level of accrued income will be reviewed each month and challenged by the Deputy Director of Finance. 4.1.7 Credit Notes Where an invoice is to be cancelled, the person requesting the original invoice will complete a Credit Note request. Credit Notes must be approved by the relevant Band 7 finance member and corresponding authority as set out in the Standing Financial Instructions. Any credit note in excess of £50k should be authorised by the Director of Finance. The reason for the Credit Note must be clearly noted on the request. The volume and value of Credit Notes requested will be monitored by the Head of Financial Services and be reported on as required. 4.2 Credit Control Standard payment terms are 30 days. Invoices are expected to be paid within 30 days of invoice date. Statements of outstanding invoices are automatically generated from the sales ledger and emailed to customers on a weekly basis.



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Customers will be telephoned 7 days after invoices have been issued to confirm receipt and understand when payment might be expected. Customers will be telephoned 2 weeks later to confirm that payment is still expected. If invoices are not paid within 30 days, Credit Control will telephone the customer and log the reasons for non-payment, and continue to telephone the customer on a weekly basis until the debt is cleared. If the value of overdue invoices exceeds £100k the customer will be telephoned daily. If the value of overdue invoices exceeds £50k the customer will be telephoned twice weekly until the debt is cleared. If at any stage the customer disputes the invoice or raises queries, Credit Control will pass the dispute across to the person who requisitioned the invoice. Queries should be resolved and cleared within three days so that Credit Control can pursue the debt collection. Monthly debtors ageing reports and KPIs are included within monthly finance pack that is presented to committees to ensure that Operational teams are also involved in supporting collection of overdue debt. The core steps are illustrated in the relevant flowcharts as follows: Shared Business Services (SBS) Customers - please see Appendix 1 Non-SBS Customers - please see Appendix 2 Where no response is received - please see Appendix 3 Credit Control process - please see Appendix 4 Example Reminder Letter - please see Appendix 5 4.2.1 Credit Control Reporting The Trust has established a Grip and Control Cash Committee group, which meet on a fortnightly basis to provide update on the aged of debt amongst other key issues relating to cash. This committee is chaired by the Head of Financial Services; the other members are Financial Controller, Financial Accounting Manager, Purchase Ledger Supervisor, Sales Ledger Clerk, Purchase Ledger Clerk and the Contracts Assistant. Feedback on ageing debt is provided by the Sales Ledger Clerk and the Contracts Assistant. Monthly KPI reporting of aged debt and profiling will be provided to the Investment Committee - please see Appendix 6. Statements will be distributed to attendees of Contract meetings that the Trust holds with its main commissioners. Debtor balances and any disputes and/or queries will be a standing agenda item at each meeting. Clinical Commissioning Groups (CCGs) this applies to are as follows:- - Sandwell and West Birmingham CCG - Wolverhampton CCG - Dudley CCG - Walsall CCG



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- Birmingham Cross City CCG - Birmingham South and Central CCG - Sandwell and West Birmingham NHS Trust - Royal Wolverhampton Hospitals NHS Trust - Walsall MBC - Walsall County Council 4.2.2 Bad Debt Write Offs Bad Debts will only be written off where the Credit Control process has run its course and in the opinion of the Head of Financial Services, in conjunction with the Credit Control team and Financial Controller (if relevant), the debt is unlikely to be paid. A summary of the proposed debts to be written off will be prepared setting out all credit control processes carried out, correspondence with the customers, reasons for non-payment and steps taken to resolve the issues. This will be presented by the Head of Financial Services for approval at the relevant Committee meetings. All proposed write offs totalling £50k or less require the approval of the Chief Executive and Director of Finance. All proposed write offs greater than £50k require the approval of the Board. 4.2.3 Bad Debt Provision The bad debt provision is reviewed monthly on the basis of the debtors ageing profile, and the relevant charge/release will be included as part of the monthly financial reporting using the following criteria:-

NHS and Councils: to include any aged debt which is over 365 days old and any known disputes where the Trust believes that payment will not be made – please see Appendix 7

Non-NHS: to include any aged debt which is over 365 days old and any known disputes where the Trust believes that payment will not be made – please see Appendix 8 4.2.4 Monthly Performance Reporting Total debt and ageing will be monitored on a monthly basis by the Head of Financial Services, and reported to the Director of Finance and the Board of Directors as part of the Trust Board report. The Director of Finance will report on the debt position as part of the finance review to the relevant Committees. The debtors ageing profile and group debt profile will be reported against the prior month. Commentary will be provided to explain any significant variances. 5.0 Payables Management 5.1 Purchase Leger Management 5.1.1 Payment Terms The Trust recognises the important role it plays within the local economy and is committed to paying its suppliers on time. To this end the Trust will aim to pay suppliers within 30 days of invoice date in line with the Prompt Payment Code, where working capital resources allow.



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5.1.2 Expenditure Accruals Where an invoice has not been received for expenditure that relates to that period, the amount will be entered into the ledger as an expenditure accrual. Expenditure accruals will be monitored at a divisional level on a monthly basis and discussed with Senior Finance colleagues as and when required. 5.1.3 Invoices Expenditure is to be supported and approved by raising a purchase order where possible. All invoices and requests for payment should be sent directly to the Trusts Purchase Ledger Department. This will allow the department to monitor the level of all expenditure invoices and help to ensure prompt payment. On receipt of an invoice the Purchase Ledger team will register the invoice within a timely manner, however the processing days may vary during various times of the year i.e. year end, quarter end, invoice is a copy due to original not received. Once an invoice has been registered it will fall under 2 categories, Invoices with a Purchase Order and Invoices without a Purchase Order. Please refer to Appendix 9 and Appendix 10 respectively for flowcharts of each category. For invoices with a purchase order the payment will be processed if all details are matched. If the invoice does not agree to the purchase order, or there is no purchase order the invoice is issued to the relevant manager for authorisation. The invoice will not be paid until the invoice is authorised. A report detailing all outstanding invoice authorisation requests is issued weekly to the Management Accounts team to review and follow up. In the case of authorising managers having left the Trust the invoice will be re-issued to a replacement authoriser and chased. 5.1.3.1 TempRe Agency The Trust is sourcing Medical staff and Allied Health Professionals (AHP’s) through a temporary staffing agency. Invoices will be received on a weekly basis, based on shifts worked for the prior week. Supporting data will be received which verifies the shift as completed. This check is completed by the Bank and Rostering Team. This invoice will be then signed off by a payroll signatory for payment and then registered on Integra for payment. The payment is to be made via BACS in line with normal creditor payments. (See 5.1.5 payment runs) 5.1.4 VAT VAT maybe charged on non-NHS invoices unless proof of exemption has been provided. The VAT element is coded to a specific nominal ledger code to ensure that it is fully recovered through the monthly completion of VAT returns. 5.1.5 Payment runs Creditors will be paid on a weekly basis when payment runs are processed. Payment runs are produced by the Purchase Ledger Team and then passed to the Financial Accountant to check if there are sufficient funds in the Trusts Bank Account to cover all payments. The payment run is then reviewed by the Financial Controller, Head of Financial Services or delegated person to make any amendments before approval. Selected



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invoices over £5k will be viewed and checked to ensure there is appropriate documentation to support payment. This process will be carried out by the Financial Accountant/Financial Controller or Head of Financial Services. If the payment run is greater than £500k, it must be authorised by two signatories before payment is sent to the Supplier through the BACS system. These signatories will be the Head of Financial Services (or equivalent band 8) and one individual within the Group C of the Financial Delegated Authority. 5.1.6 Remittances Once the payment run has been processed and payment approved, Remittance Advices will be automatically e-mailed to the supplier informing them of the invoices paid. Where no e-mailed address is held, no remittance advice is automatically sent but will be produced upon request from the supplier. 5.1.7 Statements Statements are received on a daily basis from suppliers either through the post or via the Purchase Ledger e-mail. Statements will be checked and reconciled. The Purchase Ledger team will respond to the supplier where there are discrepancies between their Statement and the Trusts statement. Where an invoice appears on the supplier’s statement but is not held on the Trusts system, the Purchase Ledger team will request a copy invoice from the supplier. Where an invoice has been disputed, the Purchase Ledger Team will inform the supplier the reason for the dispute. 5.1.8 Queries Queries are received on a daily basis via the Purchase Ledger Inbox or via the telephone. The Purchase Ledger Inbox is checked on a daily basis. Where the query is straightforward, for example when supplier is requesting a payment date, then the query should be answered on the same day. Where the query is complex and requires investigating by the Purchase Ledger team, the query will be responded to within 5 working days. Queries will be directed to and answered by the Purchase Ledger team. If a credit note is requested for a particular item this will be logged and the invoice will not be paid. Once a credit note is received into the Purchase Ledger Department it will be posted to the supplier account and any relevant payment will be re-activated. 5.1.9 Reporting The level of Payables will be monitored on a monthly basis by the Head of Financial Services and reported on as required. Performance is reported against prior month and against plan. Commentary for any significant variances is provided. Monthly reporting will incorporate Trade Payables analysis by age. 5.2 Provisions A provision is a potential liability that the Trust considers likely to be incurred.



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A provision will only be included where appropriate backing information has been provided to the Finance Department. The following section details the type of provisions that the Trust may wish to include and the methodology required for inclusion of each type. 5.2.1 Annual Leave Accrual A specific accrual for annual leave is included where an employee has agreement from their manager to carry forward a number of annual leave days into the next financial year. The annual leave accrual is calculated based on the employee’s salary, which is then used to calculate their daily rate and multiplied by the number of days to be carried forward. No accrual will be made unless confirmation has been received by the employee’s manager. This is a year-end accrual and is determined on the basis of returns from department heads. It will be released over three months as all carried forward annual leave is to be utilised by the end of June. 5.2.2 NHSLA Claims Provision A provision for an NHS Litigation Authority (NHSLA) Claim is included where a claim has been lodged with the NHSLA and the Trust’s Litigation Co-ordinator has been informed. The amount of provision to be included is determined by the NHSLA’s estimation on the Trust’s Liability and is assessed on a case by case basis and is dependent on the nature of the claim. The NHSLA will base the level of provision to be included using the following criteria:-

The extent of the injury

The award parameters for each type of injury that is included in the Judicial Studies Guidelines Book (this is used as the initial start point in calculating potential damages)

Experience of the Claim Handler at the NHSLA when dealing with previous claims that are similar

Any potential out of pocket expenses

Claimants legal costs and NHSLA handling fee

Previous Case Law

Consideration if claimant was admitted to Hospital A spreadsheet is received monthly from the Governance team which sets out all new, Ongoing and closed cases along with estimated costs on the basis of the above. This is used to determine the value of provision charge or release. 5.2.3 Redundancy Provision A provision for redundancy is included where it has been identified that an employee’s post has been put at risk and likelihood of redeployment is low. This could be due to a loss of service or restructuring of a department/division.



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The level of provision that should be included will be assessed on a case by case basis and calculated with reference to the Trust’s Management of Organisational Change Policy. Factors that should be included when calculating the level of provision are as follows:-

Level of salary that is paid to the employee on an annual basis

Number of continuous years’ service that the employee has been employed in the NHS

Pension implications should the employee be in the NHS Pension Scheme The following are examples of backing information required for review by the Finance Department to support the inclusion of a redundancy provision:-

Written Report to Committee/Meeting of the Trust highlighting roles that have been placed at risk. Relevant Committees/Meetings include Trust Board, Investment Committee and CIP Gateways.

Letter sent to employee informing them that their role has been placed at risk

Please note that this list is not exhaustive. A spreadsheet is received from HR which lists the relevant posts which are at risk and the associated estimated costs in line with the above. This will be released as the posts are vacated and the costs incurred. 5.2.4 Employment Tribunal Cases Provision A provision for an Employment Tribunal Case is included where a case has been lodged against the Trust. The level of provision that should be included is based on the nature of the claim and the likelihood of each case being lost by the Trust, and is a best estimate (not necessarily the maximum liability). The following figures should be used for each type of claim and are based on previous levels of claims paid together with the maximum level of claim possible:-

Unfair Dismissal Claim - £79k

Equality Act Claim - £200k Plus any additional legal charges. Where a case falls under both types of claims, then both amounts should be included as a provision. For claims where the probability of payment is 50% or over then the full amount will be provided for. The following are examples of backing information needed to be provided for and reviewed by the Finance Department to support the inclusion of an Employment Tribunal provision. Please note that this list is not exhaustive.

Confirmation from the Trust’s Solicitor that an Employment Tribunal Case has been lodged by the employee concerned



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Confirmation from the Trust’s Solicitor that the level of provision is suitable for the type of claim, however, they cannot confirm the exact level as it for the tribunal to determine

A copy of the ET1 form A spreadsheet is received from HR, which lists the relevant cases and the associated estimated costs in line with the above. This will be released as the costs are incurred. 5.2.5 Petty Cash The petty cash facility is to be used for the purchase of items for patient monies and sundry items of an intrinsic value, e.g. batteries, bus tickets etc. There is a limit of £30 per transaction and under no circumstances should requests be broken down into smaller values so as to avoid this level. Any amount above £30 must be agreed between the Finance Department and the disbursing department prior to disbursement. (Please see separate procedure notes on Petty Cash for further information) 5.2.6 Purchase Cards Black Country Partnership NHS Foundation Trust ("the Trust") has identified an alternative method of procurement is by use of Purchase Cards. The basic objective of using the Purchasing Card is to reduce the risk to all staff by reducing the amount of cash carried at any one time and also reduce paperwork and administration time involved in the ordering and invoice processes for low value, high volume goods and services. The Purchase Cards can be used to purchase from any "MASTERCARD" supplier providing conditions relating to "Authority to Purchase", as explained in the Purchase of Goods and Services Policy, have been met. Each cardholder is issued with a copy of these procedures, and the limits under which they can operate. These procedures attempt to cover the most common issues that arise in connection with the use of the card. (Please see separate procedure on notes on Purchase cards for further information) 6.0 Procedures connected to this Policy

Purchase of Goods and Services Financial Procedure

Petty Cash Procedure

Purchase Card Procedure 7.0 Links to Relevant Legislation There is no relevant legislation that would help the reader develop a greater understanding of this policy. 7.1 Links to Relevant National Standards There are no relevant national standards applicable in the context of this procedural document.



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7.2 Links to other Key Policies

Standing Financial Instructions Standing Financial Instructions identify the financial responsibilities, which apply to everyone working for the Trust and its constituent organisations including Trading Units. They are designed to ensure that the Trust's financial transactions are carried out in accordance with the law and with Government policy in order to achieve probity, accuracy, economy, efficiency and effectiveness. They should be used in conjunction with the Schedule of Matters reserved to the Board and the Scheme of Delegation approved by the Board of Directors.

Anti-Fraud Bribery and Corruption Policy One of the basic principles of public sector organisations is the proper use of public funds. It is therefore important that those who work in the public sector are aware of the risk of and means of enforcing the rules against fraud and other illegal acts involving deception and corruption. The Trust has procedures in place that reduce the likelihood of financial irregularities occurring. These include Standing Orders, Standing Financial Instructions, and development of documented procedures, a system of internal control and a system of risk assessment. Additionally, the Trust through its Local Counter Fraud Specialist, tries to ensure that a risk and fraud awareness culture exists within the organisation.



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8.0 Roles and Responsibilities for this Policy

Title Role Key Responsibilities

Director of Finance Executive Lead - lead responsibility for the implementation of this policy - identifying and implementing strategies for any risks in relation to the management of receivables and payables - any serious concerns regarding the implementation of this policy are brought to the attention of the Board of Directors

Business and Performance Committee

Assurance - a sub-committee of the Trust Board, that has delegated responsibility for ensuring that the management of receivables and

payables are undertaken efficiently and effectively in accordance with the Board’s Assurance Framework and strategic priorities

Audit Committee Scrutiny

- reviews the establishment and maintenance of an effective system of integrated governance, risk management and internal

control, across the whole of the Trust’s activities that supports the achievements of the Trust’s objectives

- All members of the Committee are independent non-executive directors at least one of whom will have recent and relevant

financial experience

Deputy Director of Finance

Implementation/ Leadership

- will ensure policy distribution and implementation of this policy to all finance staff on behalf of the Executive Lead - to lead discussions around this topic area including training needs with finance staff and at finance meetings as necessary - provide updates on this area of practice and policy to the Business and Performance Committee and Audit Committee

Finance Staff Implementation and Adherence

- have a responsibility to familiarise themselves with this policy and adhere to its principles - to follow at all times the procedures and processes in place for the effective administration and management of receivables

and payables set out in this policy - attend training applicable to their role - compliance with all Trust policies is a condition of employment and a breach of this policy may result in disciplinary action - if a member of staff has concerns about the way this policy is being implemented or about this area of practice in general,

they should raise this with their line manager. If they feel unable to raise the matter with them, he/she may write to an Executive Director. If they feel unable to raise the matter with an Executive Director, he/she may write to the Chairman or a Non-Executive Director. If he/she is unsure about raising a concern or requires independent advice or support, they can contact:- - their Trade Union representative - the relevant professional body - the NHS Whistleblowing Helpline - 08000 724 725



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9.0 Training

What aspect(s) of this policy will

require staff training?

Which staff groups require this

training?

Is this training covered in the Trust’s Mandatory and Risk

Management Training Needs Analysis document?

If no, how will the training be delivered?

Who will deliver the training?

How often will staff require

training

Who will ensure and monitor that staff have

this training?

There are no specific aspects

of this policy that will require staff

training

Finance Staff No, staff will receive training in relation to this policy where

it is identified in their individual training needs

analysis as part of their

development for their particular role and

responsibilities

This will be determined on a case by case basis

This will be determined on a case

by case basis

This will be determined on

a case by case basis


10.0 Equality Impact Assessment Black Country Partnership NHS Foundation Trust is committed to ensuring that the way we provide services and the way we recruit and treat staff reflects individual needs, promotes equality and does not discriminate unfairly against any particular individual or group. The Equality Impact Assessment for this policy has been completed and is readily available on the Intranet. If you require this in a different format e.g. larger print, Braille, different languages or audio tape, please contact the Equality & Diversity Team on Ext. 8067 or email [email protected] 11.0 Data Protection and Freedom of Information This statement reflects legal requirements incorporated within the Data Protection Act and Freedom of Information Act that apply to staff who work within the public sector. All staff have a responsibility to ensure that they do not disclose information about the Trust’s activities in respect of service users in its care to unauthorised individuals. This responsibility applies whether you are currently employed or after your employment ends and in certain aspects of your personal life e.g. use of social networking sites etc. The Trust seeks to ensure a high level of transparency in all its business activities but reserves the right not to disclose information where relevant legislation applies.



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12.0 Monitoring this policy is working in practice

What key elements will be monitored?

(measurable policy objectives)

Where described in policy?

How will they be monitored?

(method + sample size)

Who will undertake this monitoring?

How Frequently? Group/Committee that will receive

and review results

Group/Committee to ensure actions

are completed

Evidence this has

happened

Invoicing 4.1 Annual Audit West Midlands Internal Audit

Consortium

This will be under taken as part of their

annual cycle of internal control work

Audit Committee Audit Committee Minutes of meetings and

reports

Credit Control 4.2 Annual Audit

West Midlands

Internal Audit Consortium

This will be under taken as part of their

annual cycle of internal control work

Audit Committee Audit Committee

Minutes of

meetings and reports

Purchase Ledger Management

5.1 Annual Audit

West Midlands

Internal Audit Consortium

This will be under

taken as part of their annual cycle of

internal control work


Minutes of

meetings and reports

Provisions 5.2 Annual Audit

West Midlands

Internal Audit

Consortium

This will be under

taken as part of their annual cycle of

internal control work


Minutes of

meetings and

reports


Version 3.0 April 2017 17

Flow-Chart for SBS Customers

Statements are e-mailed out for all SBS customers on a Monday morning using mail

merge by the Financial Services team

Status of Invoices is then received back from SBS for each customer

If no response received within 1 week, follow flowchart in Appendix 3

If backing requested, check Invoice database

to see if backing information is already available

If the backing is already available,

Financial Services team to send out to customer within 3 days (preferably

earlier) of receipt of request

If the backing is not already available, then information to be requested from Invoice Requester. This is to be supplied to Financial Services within 3 working days (preferably earlier) of receipt of request

If Invoice queried

If there is a query Financial Services ask Management Accounts to provide a response/additional information within 3 working days (preferably earlier). Financial Services to forward response to SBS

Appendix 1



If Invoice disputed

For Contract Invoices For non-contract Invoices

Financial Services team to inform the following people as soon as a dispute is known:

Invoice Requester

Finance and Business Manager for Division that the Invoice relates to

Head of Contracting Financial Controller Head of Financial Services

Disputed Invoice to be raised at Contract meetings (if applicable) in conjunction with phone calls/e-mails by relevant FBM

Financial Services team to inform the following people as soon as a dispute is known:

Invoice Requester

Finance and Business Manager for Division that the Invoice relates to

Financial Controller

Head of Financial Services FBM to liaise directly with customer/ delegate responsibility to a member of their team in order to resolve dispute

If all avenues of Credit Control have been exhausted then refer to the Bad Debts Write

Off section of this Policy



Flow-Chart for Non-SBS Customers (with an e-mail address)

Statements are automatically e-mailed by Integra to customers with an e-mail address

at 7am on a Monday morning

Status of Invoices should then be received back by each customer

If no response received within 1 week, follow flowchart in Appendix 3

Follow Flowchart in Appendix 1

Appendix 2



When no response is received from e-mailed Statements

Where no responses have been received within 1 week for a customer where

Statements are e-mailed on a weekly basis

For SBS Customers For non-SBS Customers

Financial Services team to phone SBS and request them to chase

response from Customer

Financial Services team to go to Invoice request on System in order to

find out contact details

Repeat the above step on a weekly

basis until response is received Phone named contact on Invoice

request to ascertain:

The Trust holds the correct e-

mail address

The Customer has received

their statement

When a response to the Invoice

status will be received

Once response received, follow Credit

Control Flowchart in Appendix 1 Repeat the above step on a weekly

basis until response is received

Once response received, follow Credit Control Flowchart in Appendix 2

Appendix 3



Credit Control Process

.

Appendix 4

Stage 1

Customers will be telephoned 7 days after invoices have been

issued to confirm receipt

Stage 2

Customers will be telephoned 2 weeks later to confirm that payment

is still expected

Stage 3

If invoices are not paid within 30 days, Credit Control will telephone the customer and log the reasons for non-payment, and continue to telephone the customer on a weekly basis until the debt is cleared.



Example Reminder Letter

Finance Department Trust Headquarters

Delta House, Delta Point Greets Green Road

West Bromwich West Midlands

B70 9PL

Your Account Number:

Reminder

Dear I refer to the items on the attached statement which are, according to our records, overdue for payment. Should you have a query regarding any of these charges then do not hesitate to contact me, otherwise we expect your early settlement. Should you have paid within the last 7 days, please ignore this reminder. Payment can be made into the following Bank Account: Quoting the Invoice number as the reference. Account Number: 12270188 Sort Code: 08-33-00 Cheques should be made payable to “Black Country Partnership NHS FT” Yours Faithfully Credit Controller Telephone Number: 0121 612 8052

Appendix 5



Example of Monthly Key Performance Indicators Report

Appendix 6



Bad Debt Write-off Flowchart – NHS & Councils

Follow Credit Control processes in Appendices 1, 2 and 3

Once all credit control processes have been followed, a summary report should be produced detailing issues around non-payment. The report should include amount involved and action taken thus far and escalated to the following people:

Head of Financial Services

Deputy Director of Finance - Governance

Director of Finance

If Invoice(s) remain unpaid after escalation and debt write off is required. A report is to be

presented to Investment Committee & Audit Committee

Appendix 7



Bad Debt Write-off Flowchart – Non NHS/Councils

Follow Credit Control processes in Appendices 1, 2 and 3

Once all credit control processes have been followed, a summary report should be produced detailing issues around non-payment. The report should include amount involved and action taken thus far and escalated to:

Head of Financial Services


Director of Finance

Appendix 8

If Invoice(s) remain unpaid after escalation and debt write off is required. A report is to be

presented to Investment Committee & Audit Committee

Where recommendation is to continue with pursuing the debt, the debt will be passed back to the Finance Department to manage the debt collection.



Invoice with Purchase Order Flowchart

Invoice is registered on the System and checked against Purchase Order and Goods Received

Note (GRN) report

If Invoice value matches

If Invoice value doesn’t match

Invoice is processed for payment

Invoice is sent to manager to verify

Invoice is processed for payment

Appendix 9



Invoice without Purchase Order Flowchart

Invoice is registered on the System and checked against Goods Received Note (GRN) report, and automatically sent to manager for authorisation

Manager authorises Invoice

No response received from Manager

Invoice is automatically processed and payment made

within payment terms

Manager is sent an automatic reminder on the 10th working day

No response received from Manager

Invoice is escalated to next authorising manager after 30

working days

Process repeated above until authorisation (or reason for non-

payment) is received

Invoice is automatically processed and payment made

within payment terms

Appendix 10



Policy Details

* For more information on the consultation process, implementation plan, equality impact assessment,

or archiving arrangements, please contact Corporate Governance

Review and Amendment History

Version Date Details of Change

3.0 Apr 2017

Full policy review, incorporating procedures directed towards trust fund users and finance Inclusion of section 5.1.3.1 Temp Re Agency which is a new process implemented; Updated screenshots in appendix to reflect new tables used in reporting

2.0 Jul 2015

- Inclusion of authorisation limits for credit notes - Inclusion of minimum value limits for invoices - Inclusion of requirement to include VAT if relevant - Procedures for chasing older debts - Expansion of monthly reporting requirements

1.0 Oct 2013 - Inclusion of Provisions section detailing types of provision

and when they should be included - Inclusion of paragraph relating to discussion of invoices at

Title of Policy Management of Receivables and Payables Policy

Unique Identifier for this policy BCPFT-FIN-POL-01

State if policy is New or Revised Revised

Previous Policy Title where applicable n/a

Policy Category Clinical, HR, H&S, Infection Control etc.

Finance

Executive Director whose portfolio this policy comes under

Finance Director

Policy Lead/Author Job titles only

Financial Controller

Committee/Group responsible for the approval of this policy

Finance and Investment Committee

Month/year consultation process

completed * n/a

Month/year policy approved April 2017

Month/year policy ratified and issued April 2017

Next review date May 2020

Implementation Plan completed * April 2020

Equality Impact Assessment

completed * Yes

Previous version(s) archived * Yes

Disclosure status ‘B’ can be disclosed to patients and the public



main commissioner meetings

Management of Receivables and Payables

Documents

Transcript of Management of Receivables and Payables