Action Plan for Improving Timely Supply Chain Payments

1. Causes of Late Payment

Through internal analysis, we have identified the following key causes contributing to delayed payments:

1. Incorrect invoice routing: Staff occasionally order goods or services using personal details, leading to invoices being sent directly to them rather than the accounts team.
2. Delayed approvals: Managers are not consistently approving invoices in a timely manner.
3. Non-adherence to vendor setup procedures: Staff do not always utilise the new vendor setup system.
4. Resource instability: Turnover, sickness, and staffing reductions in the accounts team have extended invoice processing times.
5. Supplier errors: Vendors use incorrect formats, email addresses, or addresses on invoices.
6. Payment run schedules: Bi-weekly payment runs sometimes result in overdue invoices waiting for the next cycle.
7. Unrealistic payment terms: Staff occasionally commit to payment terms outside standard 30 days without prior consultation.

2. Actions to Improve

To resolve these issues, we have implemented and are enhancing the following measures:

1. Staff training and accountability: All employees and managers involved in procurement will receive targeted training on correct invoice submission and vendor setup procedures. Accountability measures will be enforced.
2. Enhanced approval monitoring: Approval platform updates now allow for daily email notifications to managers with outstanding approvals. Non-compliance is escalated to senior management.
3. Improved approval tools: Dashboards provide visibility of overdue invoices, enabling management to address delays effectively.
4. Vendor communication: Vendors are receiving updated instructions, including correct invoice formats and addresses, as well as links to government guidelines for invoicing standards.
5. Increase in payment runs: Transitioning to weekly payment runs to reduce the waiting time for overdue invoices.
6. Standardized payment terms: Minimum payment terms of 14 days (standard 30 days) are now mandatory.
7. Accounts team reinforcement: Exploring options to expand the accounts team and cross-train existing staff to ensure continuity and efficiency.

3. Reporting

We have established a monthly Key Performance Indicator (KPI) report covering:

• Volume of incoming invoices.
• Processing and payment speed.
• Identification of bottlenecks and recurring issues.

These reports are reviewed by our Audit Committee to assess progress, ensure compliance, and inform ongoing adjustments to our action plan.

4. Continuous Monitoring and Improvement

Daily monitoring ensures adherence to automation workflows, timely approval processing, and prompt escalation of issues. This data is consolidated in the KPI report for systematic review.

This action plan has been published on our website at https://acaciumgroup.com/action-plan/ ensuring transparency and accessibility.

This action plan has been reviewed and approved by:

Tom Richards,

Chief Financial Officer

14th November 2024