California says goodbye to late payments and late fees with this new payment tool
The California Department of FISCal (FI$Cal) released a new digital payment history tool that is sure to make life easier for state suppliers and contractors. The “FI$Cal Purchase Order Payment History Search” tool provides real-time information on payments and will serve thousands of suppliers receiving state payments. The tool, which launched in April, will also help the state save funds by preventing late payments and late fees to contractors.
The FI$Cal department spotlighted its purchase order tool in a nomination for the National Association of State Chief Information Officers (NASCIO) 2022 State IT Recognition Awards. In its submission, the FI$Cal department said late payments and fees had become so significant something had to be done.
“In the past three fiscal years, the state’s late penalties paid to businesses has drastically grown from approximately $750,000 to over $2.6 million. For our small businesses, the number of penalties has almost doubled from 2,868 penalties to 4,652 penalties,” FISCal officials said. “This is a direct result of paper processes that have not been modernized to fit into a telework or hybrid working model.”
For businesses working with the state, there was significant frustration. Before the tool’s launch, suppliers had to contact each state department individually to learn their payment status. This was done via email or over the phone. The state said the process was so cumbersome and disjointed many businesses ran into a series of roadblocks or gave up altogether.
“Business suppliers would be required to send multiple emails in search of the correct contact, only to be redirected through a departmental maze, often resulting in confusion and frustration,” FI$Cal officials said.
The state of California Department of FISCal (FI$Cal) used agile development to build the new digital payment history tool. The agile development process started with a basic website to publish recent payments, then evolved through iteration and collaboration with other departments.
Now the new tool contains more than a million payments and not only reports recent payments but real-time information on payment transactions. Additionally, the state said that the tool is designed to be user-friendly, making it easy for state contractors and suppliers to check their payment status in one place.
The new payment history tool has been upgraded so businesses can estimate the length of a payment cycle and when a payment will be issued by the state. The new tool includes a feature that allows businesses to calculate how long it will take for them to receive a payment after submitting an invoice to the state. In addition, the tool also provides transparency on what payments have been made, when they were made, and to whom they were made.
“The self-service access has drastically reduced the number of payment conversations across more than 150 departments and alleviated a majority of the workload associated with tracking down information,” FI$Cal said.
FI$Cal is continuing to provide regular updates to the Purchase Order Payment History Search tool. The state hopes that the tool will help businesses plan and estimate when they’ll receive revenue. In the future, FI$Cal plans to make the tool even better by adding more features and expanding its reach to more businesses. Already, the state said that the tool has recorded thousands of supplier payments.
“Currently, the Purchase Order Payment History Search has over one million payments to date, with hundreds of thousands of suppliers receiving state payments to date,” FI$Cal said. “The data will progressively grow but will be monitored to showcase the positive strides departments are making on creating more lean processes and improving communications with suppliers.”
For those interested in using the search tool, it can be found on the Cal eProcure website under the “Find Public Procurement Information” banner or jump to it directly by clicking here. An explainer tutorial is also available on the site.