We expect our invoices to be either paid within 30 days or disputed within 7 calendar days of our invoice date, in line with the Public Contracts Regulations 2015
We point out the Government has restated its long-standing policy commitment to pay 80% of undisputed and valid invoices within 5 days with the remainder paid in 30 days. We encourage our buyers to remit funds as soon as our invoice is validated and receipted.
Currently 1 in 10 of our invoices are paid by customers within 30 days, 2 in 25 invoices are paid within 5 days.
The schematic above depicts the usual service provisioning and payment cycle for our online services.
Purchase Orders. If you are a buyer, we expect you to be aware of your local purchasing arrangements, we expect you to provide us with the correct invoice address and Purchase Order or account code if one is required when you accept our quote or request our service.
Disputed Invoices. If our invoice is in dispute, we expect to be notified promptly and without exception within 7 (calendar) days with an explanation of the dispute in accordance Statutory guidance published by the Cabinet Office. The dispute notification must state specifically what is not compliant in our invoice and not refer to a list of possibilities; for example, such a list may refer to information the buyer is responsbile for providing to us and we are unable to validate. If we do not receive such a notification, we will assume the invoice is valid and either pursue payment or suspend our service:
"Undue delay in verifying the invoice will not be justification for failing to treat it as valid and undisputed. This will be monitored by Public Procurement Review Service."
Receipted Goods. Our services are usually provided online and delivered the instant our invoice is issued. Buyers are requested to ensure our services are receipted in a timely fashion. Un-receipted goods are insufficient justification to withhold payment:
Failure of the contract manager (or appropriate approver) to receipt/promptly receipt an amount due for payment will not be seen as sufficient justification for failing to regard the invoice as valid and undisputed. If you adopt more lengthy invoice clearance procedures, or handle large volumes of invoices, then that needs to be accommodated within the 7 calendar days statutory guideline.
Crown Commercial Service Prompt payment policy - Paying undisputed invoices in 30 days Supplementary Q&A for public sector buyers
Payment Options. Each of our invoices includes four payment methods designed to help support buyers in meeting their payment deadline:
- Securely online using a unique payment link in the invoice through a PCI DSS accredited secure third party (instant payment).
- Over the phone using a credit or debit card through a PCI DSS accredited secure third party (instant payment). From 14 Sep 2019, we may not be able to take over-the-phone payments because of the revised European PSD2 payments directive requiring Stong Customer Authenitcation. We are working with our payment gateway to implement an exemption.
- By Faster Payments using the Sort Code and Account Number on the Invoice (payment within 2 hrs during normal working hours).
- By BACS using the Sort Code and Account Number on the Invoice (payment within 4 working days).
Payments Received. We book invoices as paid when funds clear into our account. Buyers that use payment processes that take several working days to remit funds will need to ensure remittances are made in sufficient time to clear our account within the 30 day limit. We encourage buyers to ensure payment is remitted as soon as the invoice is validated (within 7 days of the invoice date). For the avoidance of doubt, a remittance advice does not constitute a payment.
Payments should reference the buyers organisation and our invoice number or remittance advice slip which should refer to our invoice number.
Prompt Payment Incentives. In certain circumstances, we offer prompt payment incentives. Any credit or subscription bonus for prompt payment and any general discount we offer is made at our sole discretion and will not allow for delays incurred through lack of a Purchase Order or incorrect invoicing details arising from any lack of information provided to us by the buyer. Prompt payment incentives will only be honoured where funds clear our account within 30 days of our original invoice date (whether it be subsequently disputed or not).
Where we make an offer of a discount, it is assumed that we will receive prompt payment for the discounted services, we do not expect to incur additional costs recovering late payments. Therefore, any time limited services offered at a discount will have the time period reverted back to the equivalent of the full cost of the service if payment is not received on time. Where this applies, we will clearly state in the invoice the time penalty to be applied in the event of a late payment.
Central Government Policy. The Government restated its long-standing policy commitment to pay 80% of undisputed and valid invoices within 5 days, with the remainder paid in 30 days, restated gain in Jan 2021. Government departments are now required to report their performance against these payment targets on a quarterly basis on GOV.UK. These new reporting requirements were announced in the Budget 2015. The Public Contracts Regulations (2015) also require 30 day payment terms to be passed down the supply chain for over 90% of all invoices. The Public Contracts Regulations 2015 require invoices to be paid within 30 days.
From 1 April 2022, suppliers bidding for central government contracts worth more than £5m per annum, will need to demonstrate to Crown Commercial Services that they pay at least 90% of their invoices to suppliers within 60 days in one of their previous two published payment reports, or risk being excluded from the procurement. Our Prompt Payment Incentives aim to encourage conformance with this Government policy.
Recovery of Debts. Late payments cost us time, resources, incur VAT charges and consume cash flow that needs to be financed. We will take a vigorous stand against late payment and non-payment of undisputed invoices. We will endeavour to send buyers payment reminders however, under the Crown Commercial Service Prompt Payment Policy Guidelines we are entitled to expect payment without issuing reminders. If we feel our reminders are unheeded or not resulting in sufficient action to complete the payment processes, we will issue Statutory Charges for Late Payment under the terms of the Late Payment of Commercial Debts (Interest) Act 1998. Failure to pay the Statutory Charges or to continue to ignore demands for payment or prevaricate from payment of undisputed invoices will result in the debt being referred to either the Public Procurement Review Service operating under Section 40 of the Small Business Enterprise and Employment Act 2015 or the Small Claims Court for recovery as appropriate.
Working with Buyers. We endeavour to work with payment teams in an efficient manner and respond promptly to reasonable requests for further information to facilitate the procurement process. All queries should be addressed to enquiries@pathwayanalytics.com quoting the invoice number.
VAT Charges. We charge VAT on our services however, VATGPB10010 provides a mechanism for Public Health bodies to recover the VAT we charge for related computer services under Contracted Out Services (COS) Heading 14 - Computer services supplied to the specification of the recipient. This allows for the reclaiming of VAT charged on computer software and related services supplied to the specification of the recipient where the supplied service is not a COTS product or is designed specifically for use by Public Health bodies. Please take appropriate advice on how to recover the VAT we charge on these services.