Holland & Barrett shamed for poor supplier payment practices

Holland & Barrett shamed for poor supplier payment practices

The health food group has been called out for taking an average of 68 days to pay clients

Health food chain Holland & Barrett has been publicly criticised for taking 68 days on average to pay its suppliers.

The global group have not been sticking to the agreement for 60 percent of its invoices.

Senior MPs along with the Small Business Commission decided to share their criticism as part of their ambition to prevent other companies behaving in this way.

Paul Uppal, small business commissioner, received a complaint from one technology company about an unpaid invoice of £15,000 with Holland & Barrett.

Uppal subsequently wrote of the company that it has “a purposeful culture of poor payment practices.”

The outstanding invoice mentioned was then paid by Holland & Barrett within 28 days.

A spokesperson from technology company Basware said: “Today’s news about Holland & Barrett being criticised by the Small Business Commissioner and senior MPs for treating suppliers “shabbily” is another example of the late payment epidemic facing the UK. Should businesses of any size have to name and shame customers before they can expect payment within a reasonable timescale?

“While recognition of this issue within Parliament is a huge step forward, it should be remembered that unethical supplier management is not endemic. In the vast majority of cases, organisations across all sectors have the best intentions when it comes to paying suppliers.

“What they lack are the processes and systems to ensure that they can do so on time, many working with antiquated platforms built in the 1980s and 1990s. Put simply, they lack the tools to do the right thing.”

Holland & Barrett responded, saying its standard payment terms were actually 90 days. This is significantly reduced for smaller businesses, and the company that complained had a 30-day payment agreement.

The health chain said the invoice was “lost in our payment process in the run-up to the busy Christmas period. Once we established what happened we resolved it very quickly”.

The impact on small businesses

It is no surprise that 50,000 businesses a year go bust while they are waiting for payments to come through.

The Federation of Small Businesses now want standard payment terms to be 30 days to help mitigate the number of businesses going under.

Despite the fact the accountancy industry is changing quickly, with technology altering the role of the accountant and new regulations like Making Tax Digital provoking an evolution of the way accounting happens, cash flow is still a fundamental priority for the industry’s small businesses.

A lack of cash flow can be a fatal blow for an SME, so incidents like the Holland & Barrett one can cause huge issues for small businesses. If they do not receive payments monthly, this could prevent them from moving forwards.

The spokesperson from Basware added: “Small businesses are the backbone of our economy, under more pressure than ever in the shadow of Brexit uncertainty.”

According to Basware’s 2018 survey, 60 percent of SMEs would like a law introduced which ensures they are paid within 45 days.

 

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