During the moving peak season, the increased amount of shipments not only affects the capacity to handle the moves but also the amount of time necessary to get paid for those moves. As we approach the 2022 peak season, we wanted to take a look at payment times in the DOD HHG industry and what we can expect for this peak season.
A Success Story
DOD HHG invoice payment times have been an industry success story over the past two years. We have seen payment times decrease substantially starting in 2020. During the early days of the Covid pandemic, PPSOs emphasized getting invoices approved faster to help keep TSPs afloat during those difficult times. The improvement in payment times we saw in early 2020 has now been sustained for two years, thanks to the hard work of the PPSOs. In the past two years, the average payment times have decreased from 6.8 days in 2018-19 to just 4.5 days in 2020-2021.
Peak Season Challenges
However, we know that those improvements will be challenged during the peak season. As the volume of shipments increases, so does the volume of invoices to approve, leading to a natural slowdown in payment times. Over the past two years, we have seen payment times increase in the third and fourth quarters by nearly 50% compared to the first two quarters of the year.
While we are optimistic payment times will continue to maintain the improvements we have seen, we do expect to see some challenges this summer. In addition to the increased volume, some of the challenges that may drive increased payment times during peak include:
- Staffing: Just as the industry struggles to hire and maintain enough employees to handle the peak volume, the PPSOs are dealing with similar circumstances. Labor shortages continue to plague some bases, causing delays in the invoicing process.
- Documentation: Since the DP3 program has never had a standardized documentation repository, each base is required to determine how to handle the requesting, receipt, and storage of documents on their own. During the flood of peak invoicing, some of these documentation systems get overwhelmed, slowing down payment times as PPSO personnel try to find the documents necessary to approve the invoice.
- System Issues: With the increased volume comes a very low margin for error on the technical side before payment times are impacted. Even short downtimes of DPS, USBank, or the PPSO documentation systems can cause substantial delays. Once a location falls behind, it is very hard to get caught up due to the continued flood of invoice submissions.
Partnering with PPSOs
Daycos has a very productive working relationship with the PPSOs. Our mission is to make their job as easy as possible and allow them to approve invoices in a timely and efficient manner, improving cash flow for our customers. Daycos’ billing customers can help us accomplish this by ensuring your documentation is legible and complete and includes a rated GBL. We also recommend that when you send documents directly to the bases, make sure they do not exceed 5MB size, as this is the maximum file size most bases can accept.
Despite the upcoming challenges of peak, we will continue to do everything we can to keep money flowing to our customers and ensure DOD HHG invoice payment times remain a success story.