NHS Organisations

Credit Control and Agreement of Balances remain to be extremely time consuming and resource intense processes

The following content has been taken from the HFMA’s fourth edition of their Agreement of NHS Balances Practical Guide and clearly explains the current challenges being experienced by those involved in the Agreement of balances process:

If you ask any NHS accountant to identify the most challenging aspect of preparing the accounts, the chances are they will say it is the agreement of invoices and outstanding balances with other NHS organisations. What is seemingly a simple task – to agree receivables, payables, revenue and expenditure within the NHS, proves both difficult and time consuming. Anecdotally,

the reasons for this include:

  • Substantial numbers of transactions between organisations for which there are no formal contracts in place.
  • Transfers of funding from one organisation to another which are intended to achieve a particular financial result.
  • Too many invoices raised late in the financial year.
  • Reconciliations between commissioners’ and providers’ figures carried out on an infrequent and untimely basis.
  • Receipts and payments that are not accurately matched to invoices. Statements that do not contain sufficient detail.
  • Differing accounting treatments in each organisation, particularly of recharges of staff and other costs.
  • The recharge of services is included in receivable and payable balances but not those for revenue and expenditure.
  • Finance staff who are not sufficiently proactive in resolving disputes.
  • Difficulties in managing the situation when no agreement can be reached.
  • Lack of ownership of the process in individual NHS organisations and the view that this is something imposed by the Department of Health (‘the Department’) and auditors rather than a useful management process.

Auditors have often been surprised by the lack of a ‘joined-up’ approach between different parts of the finance function within and between NHS organisations and have noted the effect that this can have on the agreement of balances and the wider accounts process. It is important not to view the agreement of balances as only relevant at the end of the financial year. To keep disputes to a minimum, improve the financial health of the organisation.

In close partnership with several leading NHS organisations AOB Financial Solutions has developed a simple but powerful low cost AOB portal. This portal will eliminate many of the headaches that currently exist and will streamline/automate both the existing Credit Control and Agreement of Balances processes.

The Portal is designed to facilitate on-line, real time reconciliation of all the relevant financial information between the participating organisations. It provides clear and transparent accounts making it easy to track any variances.

The Portal is designed to deliver a fully auditable dispute resolution by using on-line comments and document attachments functionality.

The AOB Portal is a secure system accessed over the internet and doesn’t require any on-site licenses/installation. It is designed to be used across all levels of the finance team:

Directors of Finance have:

– An always up-to-date, visual overview of their financial position against each of their counterparts
– The ability to instantly agree that position with their counterparts

Financial accounts staff have:

– An easy-to-use initiative tool that virtually eliminates interruptions by telephone, email etc. from counterparts
– An instant audit tool that records all communication between counterparts and any actions taken
– Automatic production of all TAC reports

AOB Portal Benefits

AVEREGE NHS FINANCE DEPARTMENT

NHS FINANCE DEPARTMENT USING AOB PORTAL

Visual view of your position vs. your counterpart

Visual view of your position vs. your counterpart

Visual view of your position vs. your counterpart

Automatic completion of TAC returns

Automatic completion of TAC returns

Automatic completion of TAC returns

Full downloadable audit trail of AOB

Full downloadable audit trail of AOB

Full downloadable audit trail of AOB

Constant interruption by phone and email from counterparts

Constant interruption by phone and email from counterparts

Constant interruption by phone and email from counterparts

Miscoded invoices easily spotted

Miscoded invoices easily spotted

Miscoded invoices easily spotted

All processes automated

All processes automated

All processes automated

Ability for DDFs to agree global position

Ability for DDFs to agree global position

Ability for DDFs to agree global position

Strategic visualisation of ledger

Strategic visualisation of ledger

Strategic visualisation of ledger

Fully automated data load process:

The AOB Portal includes sophisticated and flexible data management functionality that is capable of processing and validating any number of AP & AR data formats to fully automate the data import process. Sales and Purchase ledger data is automatically loaded into the secure cloud-based AOB database overnight from all the participating organisations.

Ability to track, identify and resolve any variances using simple, transparent and user-friendly web-based system

In a single screen, the AOB portal displays and compares relevant transactions from all the participating organisations clearly highlighting any issues. All value variances (highlighted in red) and missing invoices (highlighted in yellow) can be identifed in a matter of seconds.

Online dispute resolution

The system includes real-time communication mechanics enabling users to complete all dispute resolution on-line and maintain a full audit trail.
The AOB Portal facilitates on-line document (any number and format) storage and access.

Ability to receive and generate Excel based statement

The AOB Portal has been designed to easily receive and generate Excel based statements to ensure that the system can be used with the counterpart organisations that haven’t currently signed up to the project.

Full set of operational reports

Extensive reports designed using QlikView platform– the best in class business intelligence tool. The AOB Portal provides a full set of operational reports including Income and Expenditure analysis, Aged Debtors and Creditors control, Counterpart Reconciliation reports, etc.

AOB Portal designed with the full set of Agreement of Balances reports

The portal generates a full set of TAC (FPR) reports and reconciliation analysis.

The system is updated for every agreement of balancing exercise to ensure full compliance with the DoH requirements.