B2B Payment Terms Take A Hit From COVID-19
Delayed payments continue to plague suppliers, particularly smaller players, and unfortunately, the global pandemic has only worsened this pain point. This week’s B2B Data Digest looks at the latest stats in the fight against late payments, and finds several instances in which the COVID-19 crisis has exacerbated the late payments problem.
25 companies surveyed in the denim supply chain have revealed “destructive” behaviors from their corporate clients, according to a new report by Transformers Foundation. In addition to seeking excess discounts and canceling orders, the vendors have revealed delayed payment practices in Transformers’ new report, “Ending Unethical Brand and Retailer Behavior: The Denim Supply Chain Speaks Up.” The report discovered that most of the vendors surveyed experienced such behavior, and identified “several” retailers, brands or importers that reduced to pay for goods. In one instance, a brand required 60-day payment terms of a vendor, then filed for bankruptcy 14 days later. As a result, more than half of the suppliers surveyed said they have trouble paying their own vendors on time.
35 days, on average, is how long Travis Perkins will take to pay suppliers, the building supplies company recently said. Reports in The Construction Index revealed that Travis Perkins notified its suppliers it would be extending payment terms, citing work-from-home requirements of its accounts payable staff related to COVID-19. One supplier decried the decision, telling the publication, “They are seeking to change the payment terms without any discussion with their suppliers and use their size to bully small businesses but giving COVID as the reason.”
£23.4 billion (about $30.8 billion) in unpaid invoices is due to U.K. small businesses, according to the Department for Business, Energy & Industrial Strategy. An estimated 50,000 small businesses close every year as a result of late payments.
Source: www.pymnts.com Posted on November 9, 2020