Executive Briefings

GlaxoSmithKline Goes to Once-a-Month Vendor Payment System

The Forum for Private Business, a British small business lobbying group, recently sought to publicly shame GlaxoSmithKline (GSK) after the drugmaker told suppliers it would pay invoices only once a month, rather than on a rolling basis as they come due.

"For the sake of small businesses and the economy, the government must prioritise tackling the culture of poor payment, addressing the bully boy behaviour of these bigger companies," the group spokesman Robert Downes said.

Instead of paying invoices 60 days after they're received, GSK will pay only at the start of the month that follows a period of 60 days after the bill comes. That could make certain suppliers wait an extra month to get paid, depending on when they have billed Glaxo.

GSK spokeswoman Sarah Spencer says the company is sensitive to how the change may affect smaller suppliers. "This is why, for smaller companies, we have a number of schemes in place to help them, including alternative payment schedules and offering supply chain finance," she said in an e-mail. "For most suppliers, the changes we have made to our payment terms will have little to no impact if they submit their invoices towards the end of the month."

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"For the sake of small businesses and the economy, the government must prioritise tackling the culture of poor payment, addressing the bully boy behaviour of these bigger companies," the group spokesman Robert Downes said.

Instead of paying invoices 60 days after they're received, GSK will pay only at the start of the month that follows a period of 60 days after the bill comes. That could make certain suppliers wait an extra month to get paid, depending on when they have billed Glaxo.

GSK spokeswoman Sarah Spencer says the company is sensitive to how the change may affect smaller suppliers. "This is why, for smaller companies, we have a number of schemes in place to help them, including alternative payment schedules and offering supply chain finance," she said in an e-mail. "For most suppliers, the changes we have made to our payment terms will have little to no impact if they submit their invoices towards the end of the month."

Read Full Article