Morrisons is shortening its payment terms for smaller suppliers to a maximum of 14 days as part of wider moves to 'simplify' its buying and selling operations.
The supermarket announced that from 1 April 2017, all goods for suppliers with contracts worth up to £100,000 annually will be paid within 14 days of receipt of an electronic invoice.
As many as 3,000 suppliers are set to benefit from the move, with Morrisons also looking for a further 200 local suppliers as part of its ‘Nation’s Local Foodmakers’ initiative.
Suppliers who are already on payment terms that are less than 14 days, including some farmers, will remain on the same terms.
In a further boost to smaller suppliers, Morrisons said that to help those who currently don’t use an electronic invoicing system, it is developing a free-to-use supplier portal through which invoices can be raised and submitted. The new service is expected to be introduced later this year.
“We aim to buy and sell simply and when we listened to our smaller suppliers, they told us that these payment terms would help them with their cash flow,' said group commercial director Darren Blackhurst.'We want our smallest suppliers to grow with us.”
Further initiatives aimed at buying and selling 'simply' have included reducing the types of supplier income from 37 to three, removing or reducing many of the charges that suppliers pay, resolving cost price invoice queries within five working days and introducing a simpler standard Supply Agreement for adoption this year.
It is also developing longer-term business plans for own-brand partners and strategic suppliers, which it says allows for more effective collaboration, and launching an independent whistleblowing service so suppliers may anonymously report concerns.
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