HENDY GROUP LIMITED

The payment terms for the supply of most of the stock of the company, which is by far the largest category of supply by value, are generally dictated by the supplier as part of the agreement to distribute their products. For other suppliers, payment terms will generally be part of the negotiation for the supply of the product or service, and will be considered alongside price, quality and reliability in selecting the appropriate supplier. The company would generally expect a minimum of 30 day terms, but would normally seek terms of at least 30 days from the end of the month of invoice, which should average out at a term of around 45 days. Once agreed, the company aims to adhere to these terms as far as is practically possible. Payments for stock are generally settled by direct debit. Other supplier invoices are processed with due dates, and are picked up for settlement in the first payment run following the due date. The company makes weekly payment runs. It also makes ad hoc payments throughout the month where the need arises. Vehicle payments to manufacturers are a substantial quantity of payments, terms being 0 days.

Given that disputes over supplier invoices are an unusual occurrence, the company deals with disputes on an ad hoc basis. The company has a centralised purchase ledger department which processes and pays supplier invoices, once they have been logged, and then approved on the operating system by the manager who made the commitment to purchase. Should a supplier fail to receive payment for an invoice as expected, they should in the first instance contact the purchase ledger department on 02380-483100, to confirm whether the invoice has been received and logged, and then whether it has been approved by the relevant manager. In the event that the invoice has not been received and logged, a copy will be requested. An electronic invoice sent by e-mail is acceptable. Should the invoice be logged, but not approved by the manager who made the commitment to purchase, the purchase ledger team will inform the supplier that the invoice has not been approved, and will refer the supplier back to the manager who made the commitment. Every week managers of the company automatically receive lists of supplier invoices logged to them which remain unapproved, representing a proactive process to ensure supplier invoices are approved promptly. It is much easier to resolve disputes where the supplier is able to quote the number of the purchase order made by the company, or to provide a copy of that order.