Morrisons to pay small suppliers within two weeks

Morrisons is to shorten its payment terms for smaller suppliers to a maximum of 14 days, and will introduce a new supplier portal to make invoicing easier.

From 1 April all goods for resale suppliers (whose business with Morrisons is worth up to £100,000 annually) will be paid “within 14 days of receipt of a valid electronic invoice”, according to the supermarket.

More than 3,000 suppliers will be on the new terms.

Morrisons also wants to find 200 local suppliers as part of its Nation’s Local Foodmakers programme, who could also benefit from the change to payment terms.

In another move aimed at helping small suppliers, Morrisons is developing a free-to-use supplier portal for those who currently don’t use an electronic invoicing system through which invoices can be raised and submitted. This is expected to be introduced later this year.

Darren Blackhurst, group commercial director for Morrisons, said: “We aim to buy and sell simply and when we listened to our smaller suppliers, they told us these payment terms would help them with their cash flow. We want our smallest suppliers to grow with us.”

Suppliers who are already on payment terms that are less than 14 days will remain on the same terms.

Other recently introduced changes to the way Morrisons deals with suppliers include:

•         Reducing the type of supplier income from 37 to three

•         Removing or reducing many charges that suppliers pay

•         Resolving all cost price invoice queries within five working days

•         Introducing a simpler standard Supply Agreement for adoption this year.

The supermarket said it was also “developing longer-term business plans for own-brand partners and strategic suppliers, allowing for more effective collaboration, and launching an independent whistleblowing service so suppliers may anonymously report concerns”.

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