Debtors and sales order policy

Document control:

Document control information

Policy name: Debtors and sales order policy
Policy number: F005
Version: 1.0
Status: Final – approved
Author / lead: Associate Director of Financial Management, Accounts & Financial Services
Responsible Executive Director: Executive Director Finance & Commercial Officer
Responsible Committee: Audit Committee
Date ratified by Responsible Committee: 3 March 2026
Date approved by Board: 1 April 2026
Next review date: April 2028
Target audience: Essex ICB staff (including temporary/ bank/agency staff) Contractors engaged by the Essex ICB Staff from other Essex Partnership organisations working on behalf of the ICB
Stakeholders engaged in development of policy (internal and external):
Impact assessments undertaken: Equality & Health Inequalities Impact Assessment

Version history:

Version: 0.1
Date: 16/01/26
Author (Name and title): Ashley King, Director of Capital & Estates
Summary of amendments made: Draft ICB Policy

Version: 0.2
Date: 29/01/26
Author (Name and title): Natalie Brodie, Associate Director of Financial Management, Accounts & Financial Services Darren  Mellis, Head of Financial Services Rob Chivas, Senior Financial Accountant
Summary of amendments made: Review of draft ICB Policy

Version: 0.3
Date: 03/03/26
Author (Name and title):
Summary of amendments made: ICB Policy considered by committee

Version: 0.4
Date: 03/03/26
Author (Name and title): Corp Svcs & Gov Support Officer
Summary of amendments made: Final Approved version

Introduction

The Executive Director Finance & Commercial Officer is responsible for ensuring order to cash processes are designed and operated to support efficient, accurate and timely invoicing and receipting of cash and ensuring the debt management strategy reflects the debt management objectives of the ICB and the prevailing risks (Standard Financial Instructions).

This is a controlled document. Whilst this document may be printed (please consider if this is necessary), the electronic version posted on the intranet is the controlled copy. Any printed copies of this document are not controlled.  As a controlled document, this document should not be saved onto local or network drives but should always be accessed from the website (or requested from the Governance Lead/Team) to ensure the most up-to-date version is used.

Purpose / policy statement

This policy is a key element of the ICB’s internal control environment and describes how to ensure that the debtor and debt management responsibilities placed on the Chief Executive Officer and Executive Director Finance & Commercial Officer are discharged and implemented.

ICBs are required to identify and account for all monies owed at the earliest point in time and to ensure that the risk of bad debts is kept to a minimum.

Remit

This policy applies to all ICB staff (including temporary/ bank/agency staff), contractors engaged by the ICB and staff from other Essex  Partnership organisations working on behalf of the ICB.

Definitions

• Bad debt – a debt that cannot be recovered.
• Debtor – an organisation or individual who owes money for goods or services received.
• ICS – Integrated Care System – the partners of Essex Integrated Care System are Mid and South Essex NHS Foundation Trust, Essex Integrated Care Board, Essex Partnership University NHS Foundation Trust, North East London NHS Foundation Trust, Princess Alexandra Hospital Trust, Essex County Council, Southend City Council, Thurrock Borough Council and Provide Community Interest Company.
• IFRS15 – International Financial Reporting Standard which sets out the accounting treatment required for revenue from customers.
• ISFE2 – Integrated Single Financial Environment – uses standard NHS Oracle platform to provide a common accounting system with a single Chart of Accounts and standardised processes and reporting to all ICBs.
• ISFE2 Intercompany Module – The standard tool within Oracle Fusion for managing intragroup charges between NHS organisations, such as NHSE, ICBs, and CSUs. 
• NHS SBS – NHS Shared Business Services – NHSE mandated provider of ledger system and transactional financial accounting services.
• NHS England Group – national, regional and local teams – including ICBs, NHS trusts, and specialised commissioners.
• Purchase Order – document used to authorise expenditure issued by the purchasing organisation.
• Sales Order – document used to request that sales invoices are raised in ISFE2.
• Schedule of detailed delegated financial limits – document which shows what authority the Board has delegated to committees or staff under the powers of the Constitution. This is a schedule within the Scheme of Reservation and Delegation (SoRD) within the Constitution.
• Senior Financial Services Officer – refers to members of the financial services team, grade 8B and above.

Roles and responsibilities

Commissioning, quality and resource committee

The Commissioning, Quality and Resource Committee is responsible for assuring the ICB Board that debt is being managed effectively and that processes are in place to ensure that bad debts are minimised but are identified and written off where appropriate.

Executive Director Finance & Commercial Officer

The Executive Director Finance & Commercial Officer is responsible for the design and implementation of the debt management strategy and ensuring that the relevant financial controls are in place and operating effectively.

Financial Services Team

The ICB financial services team is responsible for raising appropriate sales invoices in ISFE2 on a timely basis. They are also responsible for ensuring that the number of sales invoices are kept to a minimum to drive efficiency within the ICB and aim to work with employees and customers to consolidate invoices where possible.

The financial services team maintains a sequential list of sales orders that should be checked at least monthly to ensure that all relevant sales invoices have been raised and that any sales orders that have not been raised as sales invoices have been accrued for by the relevant management accountant at month end.

The financial services team is responsible for ensuring that sufficient information is included on invoices for the receiving organisation to process the payment.

The financial services team should ensure that they liaise with the SBS debt management team and that the relevant member of the wider finance team and budget holder provide any requested details to clear disputes.

The financial services team will provide the latest available consolidated aged debt report to each Commissioning, Quality and Resource Committee meeting and will implement processes to deal with debts that are referred from SBS once they have exhausted the contracted follow-up processes with debtors. Exceptionally, they will identify debts for write-off where recovery is not possible or economic and provision for these debts will be made in line with the provisions of IFRS15.

Management Accounting Hub/Finance Business Partners

The ICB Management Accounting Hub, finance business partners and other relevant members of the wider finance team are responsible for working with budget holders to identify income that needs to be invoiced and ensuring that the relevant documents are completed and sent to the financial services team on a timely basis. They are also responsible for ensuring that income is forecast monthly and that any debtor queries are responded to in liaison with the relevant budget holder.

With the introduction of ISFE2, the management of debts within the NHS England Group is transacted through the intercompany module.

Budget holders

Budget holders are responsible for working with their finance lead to ensure that customers have understood and agreed any charges and fees that will be raised and for obtaining the information and evidence required to enable the financial services team to raise relevant sales invoices. 

Where customers raise queries regarding sales invoices the budget holder is responsible for liaising with the customer to resolve those issues in conjunction with their finance lead.

NHS SBS debt management team

The SBS debt management team will deal with any system related issues with the process of sales invoices notifying the financial services team where their action or input is required. 

It is the responsibility of the SBS debt management team to issue follow up letters and make collection efforts in line with their contract with NHSE. When this process has been exhausted the SBS debt management team will recommend that the ICB considers writing off the debt or seeks external debt recovery processes. Debt write off should be considered in exceptional circumstances only either because the debt is unrecoverable or uneconomic to pursue further.

Policy detail

NHS invoices

NHSE have implemented stream-lined charging between NHS organisations under Aligned Payments and Incentives (API). Payments to providers are made via Invoice Payment Files (IPF) and consolidated wherever possible to minimise the number of transactions. Whilst this applies to payments made from commissioner to provider, the same principles of minimising the number of transactions apply to payments made from provider to commissioner. 

Within ISFE2, the management of NHS England Group debts is transacted through the intercompany module. 

Non-NHS invoices

When a new debtor is recognised the budget holder should send an email to the financial services team, copied into their finance lead, detailing:

• Name of person or organisation to whom the invoice should be raised including a contact name for organisations.
• Billing address, telephone number and email address.
• Details of why the customer needs to be billed.

This will enable the financial services team to check whether the customer account already exists and set up a new account if required. Customer accounts are set up using a profile class which populates the essential account coding and should not be amended once set up. 

Sales orders are invoice requests and are completed by the finance staff liaising with budget holders. The sales order details include who to contact in the event of a query and sufficient details to be included on the sales invoice to ensure that the invoice can be paid by the recipient. Backing evidence as well as the completed sales order is sent to the financial services team.

Separately, the financial services team should have a process in place to periodically review the ledger to identify areas in which consolidation is possible for future invoices either by supplier or by timeline. This should include identifying if several departments are invoicing the same supplier for different reasons, reviewing credit notes to identify areas of poor practice so that these can be addressed, and working closely with other ICS partners including the local authorities to identify consolidation opportunities.

Payroll debtors

The ICB uses payroll services provided by The Whittington Hospital Trust who manage the recovery of all overpayments for existing ICB employees. Either the HR team or the Whittington payroll team will write to the employee and arrange for recovery of the overpayment as necessary. 

Where the debt relates to an ex-employee the Whittington payroll team notify the financial services team. Overpayments made to individuals who have subsequently left the ICB will be reclaimed via documentation initiated by the financial services team. 

Further information can be found in the Under and Overpayments Policy. 

Debt management strategy

The ICB’s debt management strategy is to collect all debts unless they are irrecoverable or uneconomic to recover. The drive to consolidate invoicing should reduce if not eliminate the need to incur finance team resources on chasing small debts.

NHSE hold the contract with SBS nationally and this includes a responsibility to issue follow up letters and make collection efforts on behalf of the ICB for non-NHS debts. 

It is important that the financial services team, relevant finance lead and the budget holder engage with the SBS debt management team as appropriate to ensure that any queries or disputes are resolved and that these discussions are documented by the financial services team where it becomes apparent that a debt is unlikely to be collectable. However, debt write off should only be considered in exceptional circumstances.

As part of the NHS Agreement of Balances process, which is carried out in accordance with national guidance, debts between NHS organisations are compared and agreed between the receiving and supplying organisations. Transactions between NHS organisations cannot be treated as bad debts and must be resolved.

The financial services team will prepare a summary of the aged debtors for review on the request of the Commissioning, Quality and Resource Committee as part of the Finance Report. It is important that the financial services team have carried out a proactive review of old debts to be able to report in sufficient detail.

At least annually, usually in quarter 4, the financial services team will produce a schedule of debts considered to be uncollectable for the Executive Director Finance & Commercial Officer. If the financial services team identify a bad debt in excess of £100k the Executive Director Finance & Commercial Officer should be notified as soon as it is identified. The schedule will detail the attempts that have been made to collect the debts and the reasons for the recommendation to write off. Debt write-off will be authorised in line with the ICB schedule of detailed delegated financial limits, and all write-offs will be recorded in the ICB’s losses and special payments register and reported to the next meeting of the Audit Committee.

A senior financial services officer will consider whether a bad or doubtful debt has implications for future transactions with the relevant customer and take actions accordingly. 

The ICB will carry a doubtful debts provision in the balance sheet based on non-NHS debts over a specified number of days overdue based on the requirements of IFRS15, if material. If doubtful debts are subsequently approved for write-off the relevant provision is utilised. The provision is reviewed at each year end.

Fraud awareness

If a staff member or officer believes or suspects that a fraudulent transaction has been processed, they should consult the ICB and contact the Anti-Crime Specialist Hannah Wenlock – [email protected]. The ICB Counter Fraud, Bribery and Corruption Policy provides more guidance on what to do if fraud is suspected and offers alternative contacts for reporting concerns.

Monitoring compliance

In the past, SBS produced monitoring metrics which included the number of credit memo requests which is an indication of the efficiency and accuracy of the ICB’s processes in relation to raising sales invoices. Under ISFE2, these are not currently available. If they get reinstated, a summary of these metrics will be reported to each meeting of the Commissioning, Quality and Resource Committee.

Aged debtor reports are summarised for inclusion in the ICB’s Finance Report, quarterly to the Commissioning, Quality and Resource Committee and the Board. 

All bad debt write offs are reported to the Audit Committee and are disclosed in the Notes to the Statutory Accounts.

Implementation and staff training

Line managers must ensure that all relevant staff are aware of the contents of this policy document and the processes required to comply.

The Executive Director of Finance & Commercial Officer is responsible for ensuring that appropriate training is given to finance staff and budget holders in order that they can fulfil their responsibilities outlined in this policy document.

Arrangements for review

This policy will be reviewed no less frequently than every two years.  An earlier review will be carried out in the event of any relevant changes in legislation, national or local policy/guidance, organisational change or other circumstances which mean the policy needs to be reviewed.

If only minor changes are required, the sponsoring Committee has authority to make these changes without referral to the Integrated Care Board. If more significant or substantial changes are required, the policy will need to be ratified by the relevant committee before final approval by the Integrated Care Board.

Associated policies, guidance and documents

Associated policies

• ICB HR Policy on payroll overpayments Under and Over Payments Policy
• ICB Counter Fraud, Bribery and Corruption Policy

References

• NHSE guidance on losses and special payments
• ICB Scheme of Reservation and Delegation
• IFRS15 – Revenue from Contracts with Customers
• ICB Standing Financial Instructions

Equality impact assessment

The EIA has identified no equality issues with this policy. 

The EIA has been included as Appendix A.

Appendix A – Equality Impact Assessment

Assessor’s name: Natalie Brodie
Assessor’s job title:  Associate Director of Financial Management, Accounts & Financial Services 
Date: 29 January 2026 

Outcomes

Evidence

Analysis of impact on equality

The Public Sector Equality Duty requires us to eliminate discrimination, advance equality of opportunity and foster good relations with protected groups. Consider how this policy / service will achieve these aims.  

N.B. In some cases it is legal to treat people differently (objective justification).

• Positive outcome – the policy/service eliminates discrimination, advances equality of opportunity and fosters good relations with protected groups
• Negative outcome – protected group(s) could be disadvantaged or discriminated against
• Neutral outcome – there is no effect currently on protected groups

Please tick to show if outcome is likely to be positive, negative or neutral. Please fill all boxes, any that aren’t applicable enter N/A.

Consider direct and indirect discrimination, harassment and victimisation.

Monitoring Outcomes

Monitoring is an ongoing process to check outcomes. It is different from a formal review which takes place at pre-agreed intervals.

Review