Asda to offer 14 day payment terms to small suppliers
New terms to benefit suppliers with up to £250,000 worth of business with the supermarket
Asda is reducing its payment terms for small suppliers to fourteen days as part of its on-going efforts to work more effectively with its supply base.
The move will benefit around 1200 small suppliers with up to £250,000 business with Asda. The first group of around 430 suppliers will move to the new terms on 1st June 2017.
The move adds to a number of mechanisms Asda has in place to support its supply base, including simplifying its Terms and Conditions and providing access to early payment finance options.
Asda also runs a ‘Sustain and Save’ programme that works with businesses to become more efficient and reduce their operating costs and recently launched a unique ‘app’ that allows its suppliers to share and swap excess products with other companies who may be able to make use of them. This programme has recently been rolled out to the regions to lend further support to local suppliers.
A spokesperson for Asda said; “Our relationship with our suppliers is vital to ensuring we can do the best job for our customers and we continue to focus on building strong partnerships with them, many of whom have been with us for decades. We’re always looking at ways we can work more effectively together and we believe it is the right thing to do to reduce our payment terms to fourteen days for our smaller suppliers.”
The reduced payment terms have been welcomed by Philip King, Chief Executive of the Chartered Institute of Credit Management who commented: “Treating suppliers fairly by accelerating payments, simplifying terms and conditions, and offering supply chain finance are important tools for maintaining a strong customer/supplier relationship. Certainty of payment, and professional credit management, help businesses of all sizes to better plan for the future.