The study comes from invoice management firm Concur, which also discovered that one in ten firms are incapable of accurately forecasting cash flow. This effectively means that company leaders have no idea how healthy their businesses actually are.Tesco, of course, has been widely publicised for its damaged financial results. In April, the company reported a £6.4bn loss and CEO Dave Lewis has been selling off numerous divisions in order to turn the supermarket’s fortunes around into a better direction. A key move in the strategy to improve its image came as Tesco promised to pay SME suppliers quicker than larger firms. The simplified payment processes will result in small companies having accounts settled within a fortnight. “By introducing a new standardised policy across each category for our larger suppliers, and shorter payment terms for our small and medium suppliers, it will help us to deliver a fairer, more transparent and consistent approach across our supply-base,” said Lewis. He added that the change in procedure will also benefit the customers, as they want “great availability and new choices”. According to Concur, over a third of companies said they had been met with charges for late payments to suppliers. And damaging operations, rather than just the bank balance, 22 per cent had their orders cancelled and a quarter said suppliers had even refused to strike up a partnership because of late invoice settlements.
Read more on getting payroll right:
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- How to ensure you’re paying your staff correctly – and avoid heavy penalties
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