Cash Flow Improvement

On Friday I briefly mentioned the issue of contract reconciliation. Since the publishing of their Corporate Targets last summer LSC Account Managers have been trying to balance individual contracts for the end of this month/year.
This is an old battle. It is also one that has resulted in a number of outcomes.
The essential position is that from the very inception of both Civil and Criminal contracting there was a financial inducement regarding the reconciliation of payments and claims. This is best summarised in the letter we referred to last week which indicates that the SPL will include:
“a one month ‘pull forward’ of payments against claims, designed to improve contracted firms’ cash flow”
Something similar was actually contained in the Criminal contract.
The standard position has been for the LSC to try and achieve an exact balance at year end unless the firm resists by relying on the above. Then there are a number of results including not allowing criminal firms the extra 10% allowed for in contract but rather 5 or 7.5%. This year they seem to be trying even harder.
We negotiated a very sensible result for an under-reporting firm last week though, seemingly against the run of play. However a friend of this site in the Midlands is currently getting a less receptive response from his RO regarding the “pull forward” which he, quite rightly, thinks is better off in his bank account rather than theirs.
All experiences of these negotiation gratefully received.