Sainsbury’s has announced a new payment management system to make it easier and quicker for suppliers to access account information and gain early payments.
The new system, called the Trading Finance Platform, enables suppliers to view trading accounts online – including invoices, debit notes, remittance advices and payment dates.
Registration for the platform will commence in early 2007, with operation planned for the start of Sainsbury’s 2007/08 financial year.
Sainsbury’s said that some suppliers would now have the option to be paid early once their invoices are approved for payment.
The retailer said that it would make early cash settlements, for suppliers opting to sell their invoices to Morgan Stanley, via the new system, at a financing rate linked to Sainsbury’s credit ratings.
Mike Coupe, Sainsbury’s trading director, said: “This is a fundamentally new way of managing the financial relationship we have with our suppliers. The system provides additional benefits giving suppliers the information they need to better manage their financial flows. They can also use the system to leverage Sainsbury’s borrowing power if they opt for early payment.”
Suppliers will participate in a trial of the platform, with initial development and deployment costs to be borne by Sainsbury’s.