By Terry Corby, CEO, Good Business Pays CIC
Last year, we identified just over 100 companies that were doing a great job at paying their suppliers fast and on time. We only considered those who were paying suppliers in 27 days or less and who were paying 95% or more of their invoices within agreed terms.
The data we use to identify these companies is collected by the UK Government (BEIS) as part of the statutory Duty to Report Regulations (Payment Practices & Performance). Large companies must report these figures every six months. Good Business Pays makes it free and easy for anyone to access that data on our website, where you can find out the payment performance and standard payment terms of any company that reports.
However, we wanted to understand if there were any other characteristics these Fast-Payers share, beyond paying their suppliers fast. We looked at a whole number of factors for all the Fast-Paying companies. Our findings were quite surprising. What they start to show is something I call “Payment Culture”. In other words, “how a company behaves when you are not looking.” Companies like to talk up their values, mission, and purpose in relation to their customers and shareholders. But the payment data shows how these companies treat their suppliers. This behaviour is only normally experienced and seen by their suppliers. Good businesses behave with as much integrity when dealing with suppliers as with their customers and shareholders.
In our Fast-Payers, we find that companies that are purpose-led, have experienced leadership and mature procurement practices, and that treat their suppliers with the same respect their customers and shareholders receive. These organisations have strong values and, crucially they have been able to translate the values spelled out on their website into practical operations that all their executives live by. Including those who work in Finance, Procurement, and their Accounts Payable teams. The results are strong and thriving partnerships with their suppliers.
For large companies that aspire to have the same kind of true partnerships with their suppliers, there is much to learn from this report. I would be happy to hear your experiences of payment (good or bad) to help us better understand how to bring an end to bad payment culture once and for all.
You can access our report here.
CEO, Good Business Pays CIC