Are Public Sector bodies as transparent as they can be about their reasons and processes for establishing the financial viability checks? It is clear that everything does need to be clearly accountable however there is a strong trend to lean on small businesses in the procurement process as buyers are risk averse.
Accountants and auditors have highlighted that their internal contract management systems may be inadequate and that the suppliers’ financial standing may pose a risk of loss or poor service.
So how can a small or medium sized business prepare for the increased scrutiny? Based on reviewing those reports here is our top 5 tips that indicate you have the systems in place to meet the needs of the buyers:
- Create financial performance thresholds for each contract – be clear about the process of escalation and outline the plan for early notification
- Provide accurate up to the day information to the public sector senior management teams to allay any concerns – don’t run accounts in quarterly arrears
- Create a secure ICT pathway dedicated to the financial management of the project with restricted access – link finance to contract performance and provide clear reasons for good, on target or poor performance
- Present clear lines of escalated responsibility and provide the reverse for decision making show the financial cascade – be clear about who is measured against the budgeted performance targets and help them understand why they are specifically accountable
- Explain how you isolate each project from the risk presented by new contracts; this from personal experience is one factor I had not taken into account.