We worked with an NHS trust to streamline the accounts payable function by setting out a process map for the future, setting out several improvements and automations.

Background

The accounts payable (AP) function at an NHS trust faced significant challenges, including high invoice volumes, staffing constraints, and lengthy processing times. The AP function processed approximately 60,000 invoices per year, many manually. With only two full-time staff dedicated to invoice registration and a total of five team members (including bank staff), workload distribution was a challenge.

The average time to register a standard invoice was 90 seconds. About 90% of invoices were registered using the purchase order route, often raised retrospectively. The team spent 50% of their time chasing users and educating staff on AP processes. Delayed receipting of purchase orders led to an average of 268 disputed or late invoices per month. Approximately 10% of invoices lacked purchase order numbers, requiring manual review for approval.

The trust were looking for advice and recommendations so they can implement the necessary improvements.

Action

NHS Midlands and Lancashire (NHS ML) held initial meetings with key stakeholders, including budget holders, authorised signatories and requisitioners, to introduce the project and discuss the current AP processes and challenges. The team collected all existing documentation related to the AP processes, including process maps, guidelines and relevant policies. A comprehensive desktop review of the existing processes was conducted to identify any obvious inefficiencies and areas that could be streamlined.

A detailed project plan was produced, highlighting priority areas and agreed delivery timescales. Regular progress reports outlined progress against anticipated milestones and key deliverables. Detailed process maps of the current state of AP processes were created, tracking the flow of invoices from receipt to payment, identifying each step taken and the time required for each activity.

The process maps were analysed to distinguish between value-adding steps (those that directly contribute to processing invoices) and non-value-adding steps (those that cause delays or redundancies). Each step of the AP process was timed to understand how long each activity takes and where bottlenecks occur.

The improvements identified and the strategic plan developed by NHS ML aimed to streamline the AP processes, reduce manual workload, enhance efficiency, and ultimately support better financial management within the trust.

Impact

The focus was on the top 10 suppliers by volume and value to understand what drives AP volume and identify opportunities to streamline processes, reduce manual interventions and automate where possible. The current process map highlighted key findings and performance issues, while future state process maps were developed to guide improvements.

Stakeholders worked together to validate and agree on the future state of the AP processes, designing new, more efficient process maps that eliminate non-value-adding steps and incorporate best practices. NHS ML developed detailed recommendations for process improvements, including suggestions for automating manual steps, implementing new software solutions, enhancing staff training and revising policies and procedures to support the new processes.

The final insight report outlined opportunities for improvement and potential future phases for further development.

For more information

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