As a high street bank, we’ve seen first-hand the impact of the coronavirus pandemic on our business banking customers. The unequal impact of the virus across sectors has left some thriving, some simply battling on, some hibernating and others burning through cash. What is clear, is that getting paid on time has never been more important – especially over the year ahead as cashflow is crucial for the UK’s SMEs.
At TSB, we believe quite simply that what we do should reflect what matters to our customers and colleagues. That’s why we’ve always aimed to pay suppliers in a timely way and made it part of our responsible business plan – the Do What Matters Plan – launched last year. At the start of the pandemic, our average timeframe to pay all suppliers was around 12 days. But we wanted to do even more to help ease the cash flow pressure on our SME partners.
To see how we could speed up our payment processes further, our procurement team brought together a list of all our contracted SMEs and established a clear process for us to follow when paying them. The aim was to get under 10 calendar days. Working with our suppliers, we made sure the electronic invoices they supplied were uploaded to our system on the same day we received them. We then tracked these and flagged their priority to internal budget holders.
Our Do What Matters Plan – which includes our commitment to prompt payment – is Executive-sponsored and included in one of our key business targets for 2021 – hardwiring its delivery for everyone in business. So both senior level support and shared targets help us to remain focused on prompt payment throughout TSB.
The result? I’m proud to report that 96% of our payments to SMEs are being paid on average within 7 days – and all other non-SME suppliers are being paid within 9 days.
The support and advice of the Small Business Commissioner and team throughout this journey has been invaluable. We were pleased to become members of the Prompt Payment Code in December 2020 and would encourage others to join this commitment too. As we look to the future economic recovery, we all have a responsibility to play our part in helping SMEs to survive the months ahead whilst demand returns and cashflow remains challenging.