Giles prepared a number of case studies illustrating the huge success of the Government Procurement Card: the direct client was Barclaycard services. CASE STUDY Payment by Government Procurement Card is embedded in the culture at Coventry City Council Coventry City Council is a metropolitan authority located in the heart of England. The council consists of more than 17,000 staff spread across various service directorates. The directorates cover a wide range of activities including education, social care, local transport and the environment. Six years ago Coventry City Council started to use the Government Procurement Card (GPC) and in June 2005, the council adopted Barclaycard Commercial as a new partner. The use of the card has steadily increased across the City Council and today the GPC has become a widely accepted purchasing tool for handling most low value, high volume payments to suppliers. A large number of card purchases There are currently approaching 1,000 cards in issue across the council used by all staff that may need to make low value payments. The cards are available to all employees who will make use of them in their role within the service directorates. Over the course of a year there is a large number of low value payments and, as the table shows, this is growing steadily. YearNumber of card transactions200631,108200741,139200842,201 When the procurement cards were first issued, they were used for purchasing up to £40,000 of goods and services each month. Today that figure has grown to around £450,000 each month. Angela Kirby, Procurement Services, Projects and Systems Manager at Coventry City Council, explains: “Low value payments represent a large proportion of the council’s purchases. If we had to deal with paper invoices for all these payments, payment would be far slower and it would demand a great deal more administrative time.” Putting this in perspective, in the 11 months to February 2009, 28 per cent of all Coventry City Council’s transactions were paid by the GPC. This figure represents only 2 per cent of the council’s total annual spend which clearly indicates the volume of low value transactions and the potential cost of handling them without an efficient card payment system. Flexible, efficient and prompt Using their cards, staff at Coventry City Council can make purchases quickly and securely which saves time and money. GPC has also helped to improve efficiency in other ways. For example, among the building service teams who carry out the Council’s ‘reactive repairs’, cards can be used to purchase materials at local trade suppliers, saving time travelling back to the council stores to pick up materials. Today, all the food suppliers serving the schools in the Coventry area accept card payments, which have boosted the number of transactions. Suppliers are seeing the benefits of being paid promptly on the production of an approved invoice, while Coventry City Council has the convenience of card payment and management information covering the whole group. Angela Kirby comments: “In our tender documents, we do not stipulate that suppliers have to sign up as merchants to be able to accept card payments but we do suggest that card payment is a preferred option. It just happens that all our food suppliers are now merchants, which suits us well.” A new online system Early in 2009, Coventry City Council introduced a new purchasing card system designed by PCCL. This requires cardholders to review and to code their purchases regularly online and makes it easy to reclaim VAT. For managers in financial operations, the system provides more visible information. Tangible savings The council has found that using the GPC card has delivered real savings and efficiencies across the whole of the City Council. Estimations made within the authority indicate that the cost of making a purchase using a procurement card is just 70 pence. This compares favourably with the cost of more than £20 for processing a traditional paper invoice. “Using the procurement card for so many purchases is the norm in the council. It is part of the culture here. It has been widely accepted by employees while giving us significant efficiencies in invoice processing.” Angela Kirby, Procurement Services, Projects and Systems Manager, Coventry City Council - ends - Edinburgh City Council Case Study EDINBURGH CITY COUNCIL CASE STUDY Payment by Government Procurement Card transforms the work of Property Conservation in Edinburgh Urgent property repairs Each year, Property Conservation at Edinburgh City Council issues about 3,500 ‘statutory notices’ to property owners across the city. These notices require owners to carry out urgent construction or repair work on the property. Drains, roofs, stonework, dividing walls, or major structural damage – many problems on Edinburgh’s quarter of a million properties might need immediate attention. If owners fail to do the work within 28 days, Property Conservation surveyors take over, working with their own contractors. They then charge the costs to the owners plus an amount to cover for their own involvement. Many properties in Edinburgh have multiple owners which makes it difficult to arrange urgent repair works within the deadline. The workload for Property Conservation and its contractors is therefore considerable. Half of the work is urgent as it concerns drainage problems which represent a public health hazard. The Property Conservation surveyors depend heavily on good working relationships with plumbers and other contractors who can turn up to do repairs at the drop of a hat. Prompt payment has transformed supplier relationships Four years ago Edinburgh City Council (ECC) took between 30 and 45 days to pay its suppliers. Each of approximately 4,500 paper-based invoices was costing the council about £64 to administer. Not only was the system expensive and inefficient, but the ECC had a reputation as a poor payer. Busy contractors were not always eager for this work. Then the council introduced the Government Procurement Card (GPC) and an online management system which provides up-to-the-minute details about every transaction. All Property Conservation contractors became merchants as a condition of their contract and everyone is now paid within 48 hours of submitting an agreed invoice. As a result, Property Conservation has identified several reliable contractors and has excellent relationships with its suppliers. Visa payments are used to pay for small jobs and also for interim monthly bills to contractors working on larger projects. Some contractors have been able to build their businesses on the back of regular, rapidly paid work. As an additional benefit to suppliers, the City Council has waived the 2.5% discount it would normally receive from suppliers for paying the bill within 14 days and this percentage goes to the bank to cover merchant charges. Online efficiency For low value works, costing under £30,000, set rates are agreed for every different item in the work schedule. Suppliers go online to the website to itemise and cost each job that they have performed. Surveyors in Property Conservation check each submission and, if they agree it is completed satisfactorily, authorise payment through the GPC embedded in the software. The agreed bill is then returned to the contractor who will apply the VAT amounts and return a full invoice back into the system. This goes to the finance department for approval who pass it to Streamline who process the payment on behalf of the Royal Bank of Scotland. The central part of this process can take place during a phone call. “We have a fully auditable, trackable, live system which gives us up-to-the-minute information. The previous paper-based system was horrendously slow by comparison and did not help our relationship with suppliers.” Tim Rayner, Senior Conservation Officer, Edinburgh City Council The system is highly flexible because it allows contractors to be paid for all the items that are agreed straightaway. Previously, if a contractor entered something on an invoice that was not agreed by the surveyors, the whole invoice would have to be resubmitted, taking even more time. For jobs costing more than £30,000 the surveyors from Property Conservation do valuations of the work carried out each month and set the amount that should be paid. This is entered into the system and the contractor has to apply his VAT to the total before submitting the bill for authorisation and subsequent rapid payment. All parties have direct access through the website and the Royal Bank of Scotland undertakes to pay contractors who bank with them within 36 hours, while those who bank elsewhere are paid within 48 hours Steadily growing Visa payment business During the first year some £2.5 million was transacted using Visa payments online system. Four years later and this figure has grown to £16.5 million. Contractors, initially sceptical of the new system, now actively seek the EEC as a preferred client and the Property Conservation enjoys an enviable relationship with its suppliers.
- ends - |
|||||||
 |
|||||||
 |
|||||||
 |
|||||||
 |
|||||||
 |
|||||||
 |
|||||||
Adverts and Advertorials |
|||||||
 |
|
|
|
|
|
|
|
Giles Emerson, |
|
|
|
