Woolworths commits to fast payment terms for smaller suppliers
The code is a voluntary, industry initiative that commits participants to paying small business suppliers within 30 days of receiving the correct invoice and correct goods or services.
Woolworths has also published its own small supplier payments policy, which incorporates its existing practice of paying small suppliers of merchandise to Woolworths supermarkets within 14 days of receiving goods
The move comes three months after the Morrison Government warned that large entities that failed to pay small businesses on time would be “named and shamed” after a review into the impact of late payments on the small business community.
Prime Minister Scott Morrison said he had heard “loud and clear from small businesses around Australia” and said he would be taking action to ensure such businesses are not to be used as a bank.
“There should be no excuses for not paying small businesses on time,” Morrison said in November.
In a statement announcing the commitment to faster payment terms, Woolworths CEO Brad Banducci said suppliers played a “key role in helping [Woolworths] deliver great experiences and products for [its] customers ever day”.
The company’s supply chain includes more than 18,500 Australian suppliers providing goods and services to Woolworths Supermarkets, BIG W, Dan Murphy’s, BWS and other brands within the group.
“We recognise how important prompt and on time payments are to the economic health of the sector and are pleased to release this policy,” Banducci said.
The Business Council of Australia’s supplier payment code notes that states that trade between small, medium and large businesses reaches more than $550 billion a year and notes that “no business exists in isolation and everyone benefits when the nation has a viable and productive small business supplier base”.
“Improving payment times will improve productivity and help ease the stress for small business owners. Healthy cash flows and working capital are crucial to the viability of a business and its ability to expand and create jobs,” the code reads.
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