Paying the bills

Taking a look at the teams that make up Accounting Services, Shared Services

When you purchase a piece of equipment or avail of a service or buy something on your Corporate Procurement Card, do you ever wonder how ESB's supplier gets paid?

Accounting Services staff, part of Shared Services Business Unit, make sure that the supplier you have purchased from gets paid prmptly and correctly.

Accounting Services provides an invoice processing, accounts payment, corporate procurement card and tax service to businesses within ESB. Accounting Services also deal with supplier queries through our 1850 number.

Following unitisation in 2001 and 2003, Accounting Services is now in three locations, Gracedieu, Waterford, Sean Mulvoy Rd., Galway and Fitzwilliam St., Dublin.

Invoice processing and threeway matching
When a service or item has been approved for purchase a purchase order is set up on the system by the buyer. Once the item or service has been received, the purchaser 'goods receipts' the item and forwards the invoice to Shared Services for Processing.

In Waterford, all invoices are scanned using a document management system, downloaded into SAP and then processed by staff. Once a PO and GR has been operated correctly within SAP and the details on the invoice match, the invoice can be released for payment.

This is known as three-way matching. From a control point of view, there is strict segregation of duties and IT access within this process.

Accounting Services staff processed over 100,000 invoices during 2006.

Accounts Payable
ESB operates a net monthly payment terms with its suppliers. Once an invoice has been processed, it will be available for payment. This will take place automatically, according to the agreed payment terms. The Account Payable unit in Fitzwilliam St., carries out weekly payment runs that pick up all invoices due for payment. Payment is then made directly into the suppliers' bank account or in some instances, by cheque.

There are some payments i.e. fuel or hedged payments that need to be paid immediately and these are made, as requested by the business, outside of the normal payment runs. Many of ESB's suppliers are based outside of Ireland and the Euro Zone and payments have to be made in other currencies e.g. sterling, dollar. Over €3billion in payments were processed by Accounting Services in 2006.

Corporate procurement cards
Over the past few years, Business Units have been moving many of their smaller purchases to Procurement Cards. This is a more effective way of purchasing small items - both for ESB and the Supplier. Accounting Services administer the CPC process on behalf of ESB. This means that when purchases have been approved, all statements and receipts are sent to Waterford for verification and input.

Accounting Services provides a detailed monthly report on Procurement Card purchases to all businesses. Accounting Services liaises with Bank of Ireland, who provide the Procurement Card service to ESB and notify businesses of any changes to the service.

Other financial services
There are a complex range of tax rules that apply to the supply of goods and services. ESB must operate taxes on services such as Relevant Contract Tax (RCT) and Professional Services Witholding Tax (PSWT). Accounting Services administers this process on behalf of ESB.

ESB must deduct VAT on goods and services where appropriate, and accounting for VAT and making VAT returns to Revenue is an important task for the company. This financial service is carried out on behalf of ESB by their staff in Waterford.

Managing the service Accounting Services manages the services that it provides to each business through an up-to-date Service Level Agreement. This SLA details the scope of the services provided, key performance indicators and the annual charges for each service. Representatives from Accounting Services meet with business units on a regular basis to review service and identify and agree processes improvements. Shared Services has launched a programme during 2006 to review with each Business Unit all the services that it provides, and in particular to identify where cost savings can be made on both sides. This has proved very successful to date, with a range of cost reductions and enhanced services agreed and in the process of implementation. EM