Derbyshire County Council is to introduce a new early payment initiative to improve cash flow for its suppliers.
The scheme is in line with the recommendations of the national prompt payment code and is designed to support businesses in the current challenging business climate.
The council spends some £527 million each year on goods and services for the people of Derbyshire and has more than 10,000 suppliers.
The scheme will enable thousands of invoices to be processed early, injecting millions of pounds of liquidity into the local economy. A small discount will be negotiated with individual suppliers, which will generate savings that will help the council to protect essential front-line services.
Derbyshire County Council’s Deputy Leader, Councillor Simon Spencer said: “We are committed to investing in strategic initiatives that help us to protect future regional growth and development. The council is an important driver of business across the county, so it is essential that we set the standard for good financial governance.
“The implementation of a sector leading early payments initiative reinforces our commitment to the many thousands of suppliers we work with.”
Ben Jackson, Chief Executive at the finance company behind the scheme said: “We are delighted to be partnering with Derbyshire County Council on its early payment initiative. The advantage of early payment cannot be underestimated. For many businesses it provides vital liquidity outside of the normal month-end billing process. In these uncertain times, as businesses across all sectors look to reopen, consolidate, or expand, having financial liquidity can make a huge difference.”
With smarter processes and increased digitisation, the scheme will ensure the council’s large-scale payment function is more efficient and effective for suppliers. It will also offer them the choice to be paid early, typically up to three weeks earlier than standard payment terms.
A dedicated team from the finance company is working with the council to put the new scheme in place and expected to be launched over the summer of 2023.