Tracy Ewen, managing director of IGF Invoice Finance, comments on Tesco’s recent announcement to simplify its payment terms to create ‘fairer’ deals with suppliers:
“Tesco’s unveiling of new payment terms is a clear response to the GCA’s survey earlier this year, which highlighted delays in payments as a top issue raised by suppliers. The new terms, already long overdue, will not be brought into effect until June 2016 so small and medium-sized suppliers will continue to be subjected to unsustainable payments over the coming months.
Whilst this is a positive step, it remains to be seen if others in the sector will follow suit. Unfair payments is a topic that continuously resurfaces and suppliers are still waiting for any substantial support from Government to help tackle the issue, with the date for the Enterprise Bill coming in to place still very much an uncertainty.
Until Tesco’s new terms come into effect, there are options available to smaller suppliers that cover the gap between completed work and money in the bank. It’s imperative for businesses to thoroughly review their options and ensure to make use of any free financial advice available, before pressure from larger customers impacts their growth or operations.”