This measure is important because DVHA is required by Finance and Management Policy 5.0 to pay vendors on-time and according to generally accepted standard payment terms: Net30 for contracts and Net00 for grants.

This performance measure informs how efficiently the unit is managing the financial aspects of its agreements.  Approximately 21% of DVHA agreements have Net 00 terms rather than the State standard Net 30. The majority of those are grant agreements, requiring more detailed backup support from vendors before payment is fully approved by the State. This has often resulted in invoices initially being rejected or DVHA requiring and waiting for additional information from vendors, thereby delaying the process. Additionally, the VISION system determines payment due date based on the date of the vendor’s invoice. DVHA’s agreements, however, are contractually based on the date the State receives an error-free invoice and complete supporting documentation, not on the date of the invoice. DVHA works to initially review invoices within three business days to promptly identify issues and inform vendors of needed corrections, including invoice dates that match submission dates.  Invoice processing KPIs are used to locate barriers to successful operations and design strategies that will lead to better performance.

During SFY21, the Unit exceeded the 80% payment target by processing timely invoices 93% of the time. The lowest monthly percentage was 86.2% in the month of August 2020, which is a busy month for annual closeout reports. To date in SFY22, the Unit is processing timely invoices at an average rate of 92.4%, still well above the 80% target. In SFY22, the lowest monthly percentage to date was November 2021, where the rate dropped below the 80% target to 78.2% due to staff utilizing time-off during the holiday season and one Unit member being out on medical leave with limited coverage available to process invoices in their absence. The timeliness of processed invoices fell in June 2022 from recent months due to closure of the payment system.  Invoices received during the time of the closure were put on hold until the start of the next state fiscal year. The reason for the lower than average % paid on time in July 2022 is due to our AP system shutting down June 15th. We were not able to process invoices from 6/15-7/6/22, which caused a backlog of invoices to get through once we could start processing payment in SFY23. During the blackout period, invoices became due, but we were unable to process them for payment. In July 2022, the unit processed 87 invoices, and numerous team members took time off during July. At a rate of 79.5% processed timely, an average of 65 of the 87 invoices were paid on time. For reference, the unit processed 49 invoices in April, 62 in May, and 45 in June at a paid-on-time rate of 93% or higher.

Narrative last updated:  08/17/2022

• Department of Finance & Management
• DVHA Vendors