As the year draws to a close, suppliers are inevitably focused on cash flow – or how Arsenal can make up a nine-point gap. But fear not, dear readers, because we’ve brought in an expert to shed light on a solution that could make all the difference: early payment.

Meet Alex Jones, Senior Business Development Executive at Oxygen Finance and our resident early payment guru. Alex knows a thing or two about helping suppliers get paid faster. He’s made it his mission – a mission he has enthusiastically accepted – to spread the word about early payment far and wide. Today, he’s here to share his insights with us.

So, let’s dive into the world of early payment, with none other than Alex Jones leading the charge!

What is Early Payment?

Now, you might be wondering, “Alex, what exactly is this early payment thing you keep going on about?” Allow me to enlighten you! Early payment is a scheme that enables suppliers to get paid faster from the local authorities they work with.

Oxygen Finance is the UK’s leading early payment solution provider to the public sector. We work with thousands of suppliers across our client base to help them get paid early.

So, what are these incredible benefits I speak of? Let me explain:

• Prioritised Cash Flow: By getting paid early, suppliers can improve their cash flow and keep operations on track.
• Increased Visibility: Early payment schemes help suppliers gain more visibility within the local authorities they work with. It’s an excellent way to stand out and demonstrate reliability.
• Enhanced Stakeholder Relationships: Receiving early payment strengthens relationships with key stakeholders within the local authority, showing that suppliers are valued and trusted.
• Streamlined Invoicing: Early payment often comes with more efficient invoicing processes. By eliminating unnecessary back-and-forth, suppliers can save time and resources that can be better used elsewhere in the business.

Too good to be true? A reasonable response. But instead of taking my word for it, let’s hear from suppliers who have directly benefited from the scheme.

Benefits of Early Payment – Financial Gain, Process Improvements, and Relationship Building

• “Faster payment has enabled us to invest in the business. The small rebate fee is more cost effective than other types of funding available and worthwhile given how quickly we receive payment – typically within 3 days. The scheme was easy to join, and we continue to invoice the Council in the same way. Importantly, the programme was preferred over other funding options, such as Invoice Factoring, as it avoided the need to involve a third party and as such makes it easier to resolve queries. With this programme, all our invoice data and client references continue to be shared directly between us and the Council which is essential for patient confidentiality.” –  Jack Baker, Director, Patience Healthcare

• “Early payment is a massive help to a small company such as ours. It gives us the cash flow we need. It allows us to pay our local suppliers quicker, which keeps money moving through the local economy. Typically, we’re paid 20 to 28 days quicker, which means that we haven’t had to run credit lines. Obviously, the money that we give back as a rebate is reinvested in the local economy. That’s an important part of our social value. There’s no factoring involved. The only thing it costs you is a small percentage of the total invoice value at the end. And for 20-28 days quicker – it’s worth every penny!”  –  David Bottomley, Director, Bottomley’s Print Services

• “We have been very happy with the service and the process runs smoothly. When we received the initial information, it was easy and quick to sign up. We continue to send our invoices through to the council but received faster payment. In our experience, invoices are typically paid within 7 days, much faster than the standard terms, which is very positive for our business.” –  Junaid Amin, Director, Freerun Private Services

• “The programme is a good system that works well for us; saving us time and making sure payments are received quickly. Our invoices are paid quicker than before, supporting our cash flow and reducing the need for us to turn to more expensive forms of finance.  The introduction to the programme was clear and we had everything we needed to get started. The time spent by accounts receivable on payment queries has significantly reduced. We’re happy with the programme.” –  Derek Henderson, Managing Director, Ultimate Risk Management Ltd

These are just a few examples, but trust me, there are plenty more – each supplier has their own reasons for adopting the scheme.

Why Do Local Authorities Offer Early Payment?

Now that we’ve heard from suppliers, you might be wondering: what motivates councils to adopt such schemes in the first place? Let me break it down for you:

1. Supporting Local Businesses: Offering early payment helps local authorities support small and medium-sized enterprises in their communities, demonstrating that they value their suppliers and want to see them thrive.
2. Improved Supplier Relationships: When suppliers feel valued, it fosters stronger, more positive relationships with the local authority – a win-win for both parties.
3. Increased Efficiency: Early payment schemes often streamline invoicing processes, saving time and resources for local authorities.
4. Boosting Frontline Services: Many small and local suppliers enjoy early payment at no cost through one of the many FreePay programmes available. For other firms, joining the programme involves a small rebate fee that’s directly tied to how early they get paid. The best part? That rebate goes straight into supporting local frontline services – helping communities thrive while keeping cash flowing.

The Bottom Line on Early Payment

This might seem like a lot to take in, especially with the holiday season fast approaching – a stressful time for suppliers and local authorities alike. But early payment can ease some of that burden.

By getting paid faster, suppliers can ensure they have the cash flow to end the year on a high note. For local authorities, offering early payment can help them hit targets while supporting their local business communities.

If you’re sold on the benefits of early payment (and let’s face it – how could you not be after reading this?), but you’re worried it might disrupt your processes, let me reassure you: it’s easier than you think.

At Oxygen Finance, we work with numerous local authorities across the UK to implement early payment schemes. If you want to find out which councils we partner with and see if your local authority has a programme, take a look here.

If you’re a supplier working with one of these local authorities, reach out to us. We’ll walk you through the process and have you set up in no time.

So, why not give early payment a try? You won’t regret it.

Until next time, this is the incredibly witty, dashingly handsome, and Oxygen Finance’s Best Dressed 2023, Alexander Haydn Jones, signing off.