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Prompt Payment Code shares BAT’s Code compliance journey success

Wednesday 10th August, 2022

British American Tobacco Limited has improved and enhanced supplier payments in compliance with the UK Prompt Payment Code. BAT’s Code Compliance Journey is published in a case study by the PPC.

As one of the initial signatories to the Prompt Payment Code, BAT has always recognised the importance of working in partnership with suppliers, and the pivotal role they play as they build A Better Tomorrow™ by reducing the health impact of their business.

According to the case study, while they were paying on time, only 73% of our invoices were being paid within 60 days, and to truly adhere to the spirit of the Code, there was work to do. As a result, they undertook a full review their payment processes over the past three years to evaluate what they could do differently.

They identified several changes – some small and simple, some more complex – that needed to be implemented. Having consistent board level support was important and became even more so as they navigated the COVID-19 pandemic and its wider economic impacts.

In April 2022, they paid almost 95% of all invoices from small companies within 30 days, up from less than 60% in the second half of 2021.

“This necessitated a thorough assessment of our supplier data in the UK to determine if they met the small company definition. We sought to confirm directly with our suppliers and, where we could not, we proactively rated a supplier as small for the purposes of payments.” According to the case study.

For all those classed as small, they immediately reduced payment terms regardless of the previously agreed terms.

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