in Aerospace

Rolls-Royce commits to prompt payment of UK suppliers

Posted 30 April 2019 · Add Comment

Rolls-Royce has announced that following changes in the the UK Governmentís Prompt Payment Code, it remains committed to the prompt payment of all its suppliers.



Rolls-Royce stated that it 'understands that recent changes made to the assessment criteria for the UK Government’s Prompt Payment Code, administered by the Chartered Institute of Credit Management (CICM), have resulted in our suspension from the Code – specifically, in respect of our failure to pay at least 95% of our supplier invoices within 60 days'.

It stressed that as it is demonstrably committed to the fair and appropriate treatment of all our suppliers, it looks forward to working with CICM and the Prompt Payment Code Compliance Board to assist them in gaining a clearer understanding of the way in which we differentiate between large suppliers and smaller suppliers, who we believe merit additional assistance.

Rolls-Royce make well over 500,000 payments to suppliers every year and adopts a flexible approach which matches payment terms to the requirements and capabilities of its suppliers. First, it differentiates between its smaller suppliers – whose interests the Code champions – and its larger suppliers, applying appropriate and jointly agreed payment terms to each. A shorter preferred payment term of 30 days end of week, is available for its many smaller suppliers around the world. Second, it considers the option of early payment to suppliers who are facing financial constraint. Third, it offers supply chain financing at attractive rates, which enables its suppliers to receive their payment sooner if they wish.

This approach, together with its commitment to shorter payment terms for smaller suppliers, was sufficient for the company to meet the criteria when it signed up to the Code in 2012 and were reconfirmed in 2016.

Rolls-Royce said that nothing has fundamentally changed in its approach since then and that as a group it pays around 90% of its invoices on time.

Rolls-Royce's statement goes on to say: 'We have long-term contracts with larger suppliers where payment terms have been mutually agreed at 75 days end of week. Previously we were able to balance these against the more preferential treatment we offer smaller suppliers and remain compliant with the Code. Following a change in assessment approach, this is no longer the case. We continue to believe the way we have designed our payment terms is in keeping with the spirit of the Code. However, the significant volume of invoices we receive from our large suppliers – and the removal of the consideration of our preferential treatment for smaller suppliers – has pushed us below the compliance criteria as it is now being assessed'.

 

* required field

Post a comment

Other Stories
Advertisement
Latest News

NCA launches its National Strategic Assessment

There are at least 181,000 offenders linked to serious and organised crime (SOC) in the UK, the National Crime Agency (NCA) revealed today, as it launched its National Strategic Assessment (NSA) 2019 Ė the most comprehensive study yet of

Eric Beranger appointed CEO of MBDA

Eric Beranger is to be MBDAís new Chief Executive Officer, with effect from 1st June 2019, replacing Antoine Bouvier.

Heathrow to commence statutory consultation on its expansion plans

Heathrow announced today that its statutory 12 and a half-week consultation on its expansion plans will launch on the 18th of June.

First student takes solo flight from modernised ETPS

Flt Lt Ed Eldred has made the first solo flight as a student from the recently modernised Empire Test Pilotsí School (ETPS).

FUCHS extends apprenticeship programme.

FUCHS Lubricants, which currently has 13 apprentices operating from its UK headquarters in Stoke-on-Trent, is now on the search for more youngsters to join the growing team.

Birmingham Airport's April passenger numbers up +4.1%

Birmingham Airport welcomed 1,002,473 passengers through its terminal doors during the month of April, this is up +4.1% up on the same month last year.

See us at
DSEI JP BT1605201119SMIFAVWS BT1302060619VIDSE BT1605060320