Anglo American is shifting to a 30-day payment policy for small to medium-sized Australian businesses, in a bid to support small businesses with their accounts and mitigate cash flow dilemmas.
”We are pleased to provide additional certainty to our small and medium-sized business suppliers through clarifying our current practice of 30-day payment terms,” said Tyler Mitchelson, Anglo American metallurgical coal CEO.
The announcement follows a notable trend in business practices, whereby more and more major companies in the industry are evaluating the manner in which they deal with local and regional businesses.
“Anglo American has long recognised the need for a localised approach to procurement in the regional areas.”
“We value our relationships with supplier partners and will continue to work closely with them to ensure we deliver sustainable economic outcomes for our communities.”
“Our business practices for supplier payment terms demonstrate one way we are achieving this,” Mitchelson said.“Last year, around 73 per cent of our total procurement spend for our Australian operations occurred within Queensland.”
Within the industry, BHP has also made policy changes where it has adjusted its procurement policies for suppliers, extending preferred payment terms of 30 days for Australian businesses.
According to Australian Mining, BHP’s change will see “more than 600 local businesses in Queensland and 300 local businesses in New South Wales” receive preferential payment terms from December 1, 2018.
While larger businesses may have the capacity to deal with delayed or drawn out payment schedules, many small to medium sized businesses may find themselves in a dilemma, where SMEs may rely on quick or on-time payment/delivery turnarounds to allow them to finish or take on another project.
Source: Australian Mining