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28 November 2012 | Anna Reynolds
Oldham Council believes it will save £2 million through a payment system that enables local authorities to pay suppliers early in exchange for a cash return.
The local authority has been piloting the ‘early payment’ programme by Oxygen Finance, and have paid £73 million in supplier bills this way since mid-2012.
Under the scheme, Oxygen handles the payment of all supplier invoices, the majority of which are SMEs, and the council receives a minimum of one per cent back of the value of each invoice, which has been negotiated by the provider. This will generate £2 million over a four-year period.
Charlie Parker, chief executive at the council, said in a statement: “Our work with Oxygen to implement the early payment programme is helping Oldham Council to make significant savings over the next few years.”
Roberto Moretti, European chief executive at Oxygen said: “There are examples of local authorities spending more money processing low-value invoices than the actual price of the product or service they commissioned. Invoices cost a minimum of £70 to process and hundreds go through systems worth less than that.”
The company added that if all councils adopted this approach, £1.5 billion could be saved.