Sainsbury’s has created a new payment management system, which it says has been designed to make it easier and quicker for suppliers to access account information and gain early payments.
The UK’s number three retailer has combined with Morgan Stanley to launch the new system, through which all Sainsbury’s suppliers will be paid. Called the Trading Finance Platform (Platform), the system enables suppliers to view online their trading account with Sainsbury’s including invoices, debit notes, remittance advices and payment dates, giving them much better visibility of their expected cash flow.
It is being marketed particularly as a boost for smaller suppliers. Morgan Stanely will act as a lender under the scheme, giving smaller suppliers access to their cash more quickly, for a small charge. Sainsbury’s said that, under current interest rate terms, a supplier owed £100 would be paid £99.30 in five days of invoice approval - as opposed to as much as 45 days under the previous regime.
Commenting on the initiative, Mike Coupe, Sainsbury's Trading Director said: “This is a fundamentally new way of managing the financial relationship we have with our suppliers. The system provides additional benefits giving suppliers the information they need to better manage their financial flows."
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