Making Supplier Payments Simple With Evaluated Receipt Settlement
Summary
Since 2003 the Scottish Government (SG) has used Evaluated Receipt Settlement (ERS), or payment on receipt as it is commonly known. ERS is normally used for infra-structure suppliers and service providers (e.g. Scottish and Southern Energy (SSE), BT, Dalkia). ERS offers a simple method to purchase and pay for goods and 'services' where demand cannot be forecast and the value of the goods or "services" are mid to high value.
Background
A number of different methods can be used which act as confirmation of the goods/service. This could range from delivery notes for goods to an electronic statement confirming service completion. In the case of SSE, there are Internet based solutions which offer tremendous potential for reviewing electricity consumption on-line thereby eliminating the need for paper invoices and facilitating the move towards ERS.
ERS means that after the customer has received the goods or services ordered on the eProcurement Scotl@nd Service (ePS) they can, in the case of SSE use the Internet to view consumption which acts as a receipt of the service. The customer enters in the receipting screen within ePS the consumption figures which will then generate an automatic electronic message to the SG's Finance System to pay SSE according to the contract payment terms.
The SG have already implemented ERS for a wide range of media and communications suppliers including TMP Worldwide who provide recruitment and public information notice advertising.
Benefits
The benefits to the SG of evaluated receipt settlement through ePS include:
- Faster Payment -guaranteed payment in line with the credit terms assigned in the Finance System
- Reduction in administrative costs for customers and suppliers
- Ease of use for both customers and suppliers
- Improvement in invoice accuracy
- Reduction in invoice queries
- Elimination of duplicate data entry and manual processing
- Fast and accurate data upload into Finance System
- Environmental benefits in saving paper
- Electronic reports provide a clear audit trail
- Simplification of the purchase to pay process through eliminating a number of steps within the process
- Elimination of the traditional paper invoice from the supplier
- Provides the opportunity to engage with major "service" providers
Achievements
The SG estimates savings of £9.60 per transaction on processing costs by using ePS with evaluated receipt settlement rather than the SG's Finance System and BACS payment. The SG are currently evaluating the savings for those suppliers now on ERS. An update will be available in the near future.
More Information ...
Should you wish further information relating to this case study or general information about the eProcurement Scotl@nd service please contact:
eProcurement Scotland General Enquiries
Telephone: 0131 244 3618
E-mail: eprocurement@scotland.gsi.gov.uk
Sarah Stevenson
P2P Process Specialist
Telephone: 0131 244 0723
E-mail: Sarah.Stevenson@scotland.gsi.gov.uk