Since 2017 large UK companies have had to publish how quickly they pay their suppliers. Every six months we file a report on a government website showing our average time to pay an invoice and the share we paid within thirty days, within sixty days and after that. Anyone can look it up, and our suppliers do. Several of the small manufacturers and hauliers we buy from have quoted our figures back to us when negotiating terms.
Last spring our finance director asked me why our figures had got worse in three reports running. I assumed IT had nothing to do with it. Then finance broke the figures down by the department that approves each invoice. My department approved about one invoice in twelve and accounted for nearly a third of those paid after sixty days.
The reason was in how we approve. When a lorry of timber arrives, goods in records it and the invoice matches automatically. Nothing arrives for a software subscription, a support contract or a consultant's week of work, so each of those invoices waited for a named person in IT to confirm the service had been delivered. That was usually whoever had raised the original order. Some were project managers who had moved on, some were engineers on leave, and some had never been told that an approval request was a task rather than a notification. Invoices sat for weeks. One small networking firm in Grimsby had waited ninety four days for four thousand pounds, and had quietly stopped answering our calls for urgent work.
None of this looked like a business problem from inside IT. Each delay was a few clicks somebody had not got round to. Together they were part of a figure published under our company's name.
We changed it within a month. Recurring contracts with fixed charges are now approved once, at signature, for their whole term, and are paid when they fall due unless somebody disputes them. Every other IT invoice goes to a team queue rather than a person, with a deadline of five working days, and anything older appears in my weekly report. Our share of invoices paid after sixty days has fallen from thirty one percent to six.
Your department's habits can end up in figures the company publishes. Find out which ones before somebody outside does.
– Serguey Shinder
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