1. Welcome
Employee Engagement
April 2014
Kier Early Payment Scheme

2. Kier Early Payment Scheme
What is the Kier Early Payment Scheme?
Kier has selected HSBC Bank as a scheme provider
Payment is made earlier than current terms
Payment of approved invoices only

3. Benefits Benefit to subcontractor:
Access to cash earlier than current payment terms
Competitive rate of interest (based on Kier’s credit rating)
Does not affect existing credit facilities
Benefit to Kier – more cash to self-finance developments, more work for subcontractors
Benefit to HSBC – receive early payment charge

4. Automated vs manual payment
HSBC offers two different schemes: automated and manual
Automated
Manual
Meaning
Annual rate
Set up time
Early Payment Charge (£1000 invoice drawn on 21 days)
All eligible invoices are paid into subcontractor bank account net of early payment charge. No option to defer receipt.
3 month GBP LIBOR %
i.e. 1.55% based on Jan-16 LIBOR
5 days from return of form
£3.14
Subcontractor chooses when within the period eligible invoices are paid. Similar to existing schemes with Lloyds and Santander.
3 month GBP LIBOR + 1.1%
i.e. 1.70% based on Jan-16 LIBOR
Typically 30 days
£3.45

5. Timelines for payment Automated Manual
Sub-contractor issues application
Day -7
Kier issues payment notice
Day 14
Kier uploads invoice
Day 21
Automated
Automated payment from HSBC to sub-contractor.
Day 0
Specified date
Day 15
Sub-contractor issues VAT invoice
Day 95
Kier pays HSBC
Sub-contractor issues application
Day -7
Kier issues payment notice
Day 14
Kier uploads invoice
Day 21
Manual
Sub-contractor manually draws down payment from HSBC.
Day 0
Specified date
Day 15
Sub-contractor issues VAT invoice
Day 95
Kier pays HSBC

6. VAT invoices
Switch from self-billing to VAT invoices for all payments through Kier Early Payment Scheme
This is to avoid risk of change in VAT rate in the period between HSBC payment to subcontractor and Kier payment to HSBC
VAT invoice required for value shown at foot of payment notice before payment is made.

7. VAT invoicing

8. Automated payments
Sub-contractor
1. Subcontractor submits application to Kier, Kier issues payment notice, subcontractor issues VAT invoice
3. Bank pays subcontractor full value of invoice less discount fee 3
2. Kier sends approval details to bank 2
Bank 1
4. Bank collects full payment from Kier on maturity. 4
Kier

9. Manual payments
1. Subcontractor submits application to Kier, Kier issues payment notice, subcontractor issues VAT invoice
Sub-contractor
Bank Website
4. Subcontractor uses HSBCnet to select invoice for early payment 4
2. Kier sends approval details to bank 2
3. Bank notifies subcontractor that the payment is available for drawdown by displaying in HSBCnet (HSBC’s online banking platform) 3
5. Bank pays subcontractor full value of invoice less discount fee 5
Bank 1
6. Bank collects full payment from Kier on maturity 6
Kier

10. Automated payments sign up process
Simple sign-up– only address and signature!
Sub-contractor 2
Bank 3
2. Subcontractor s SAF to Kier and to Bank indicating automated 2
1. Kier sends Subcontractor Administration Form (SAF) to subcontractor 1
3. HSBC completes acknowledgement confirming subcontractor’s intentions and provides notice & terms to subcontractor. Upon acknowledgement, HSBC on-boards subcontractor.
Kier

11. Manual payments sign up process
1. Kier sends Subcontractor Administration Form (SAF) to subcontractor 3
Sub-contractor 4
Bank 5
2. Subcontractor s SAF to Kier and to Bank indicating manual and completes HSBCnet user registration 6
3. HSBCnet Notice and terms provided to subcontractor, HSBC awaits acknowledgement 1 2
4. Following acknowledgment HSBC completes setup and dispatches HSBCnet devices to subcontractor
5. Subcontractor receives HSBCnet devices and confirms to HSBC
6. HSBC provides HSBCnet training to subcontractor and upon completion on-boards the subcontractor.
Kier

12. Summary Early access to cash – from day 21
Competitive finance rates –1.55% APR for automated product as at January 2016
Simple sign up – only address and signature required for automated product
Support available from HSBC and Kier