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Departmental Billing

Volume 488: debated on Monday 23 February 2009

To ask the Secretary of State for Defence what his policy is on the period in which suppliers to his Department are paid; and whether his Department issues guidance on the prompt payment of invoices. (256700)

The Department currently aims to meet the Late Payment of Commercial Debts (Interest) Act requirement of paying valid bills within 30 calendar days of receipt by allowing up to 19 days for MOD branches to confirm that the services or goods supplied have been satisfactorily delivered and then 11 calendar days for the Financial Management Shared Service Centre (FMSSC) to check the invoices and make payment. The FMSSC has introduced daily payment runs to enhance its flexibility in providing a prompt and efficient service to industry and the smaller supplier.

The Department is reviewing the processes associated with the overall payment cycle and is working towards meeting the Government’s 10 day target set for small and medium enterprises. Once this work is complete it should ensure that the Department is able to measure the 10 day target and report on performance against it. The 10 day target will apply to all MOD suppliers, irrespective of size, as it would be impractical to differentiate between small and medium size enterprises and others.

Guidance on prompt payment is provided in the form of a Contract Payment Guide available via the MOD website:

http://www.mod.uk/DefenceInternet/AboutDefence/WhatWeDo/FinanceandProcurement/FMSSC/Contract PaymentGuide.htm

The guide does not apply to goods and services covered by the electronic P2P purchasing arrangements as payment advice for this type of invoice is issued separately to suppliers. The FMSSC also operates a help desk facility to assist suppliers with their enquiries.