At its supplier conference this week, the retailer launched what it said was an ‘industry first’ payment management system, the Trading Finance Platform. All Sainsbury's suppliers will be paid through the new system and will be able to view their trading account online. Suppliers will also have the option to borrow against their approved invoices, so they are in effect paid early.
“This is a fundamentally new way of managing the financial relationship we have with our suppliers,” said Sainsbury's trading director Mike Coupe. “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.”
CEO Justin King said Sainsbury's had “set out its stall as the best supermarket to do business with”.
Suppliers will be invited to trial the new system before committing, and registration has already started. In order to be paid early, suppliers can opt to sell their invoices to Morgan Stanley at a financing rate linked to Sainsbury's credit ratings.