Zurich Insurance is reviewing its payment processes after being pulled up by a watchdog for paying a supplier 65 days late.
In a report the small business commissioner (SBC) said delay was caused by “administrative errors” and Zurich “must have more efficient systems in place”.
The SBC said the invoice for £1,998.58, for vehicle repair services carried out by a small business, was unpaid on the due date “despite numerous attempts to obtain payment” and the firm was “close to incurring interest on their business overdraft which would have impacted their cash flow”.
SBC Paul Uppal said: “This is yet another example of a delay in payment caused by administrative errors.
“The amount of time it took to navigate through the company’s internal communication system and speak to a person with sufficient delegated responsibility to resolve the dispute is simply not acceptable.”
In response Zurich said it would “conduct a full review of the process and ensure that feedback is provided to the teams where improvements can be made”.
“We will also ensure that our vendor management team is made aware of your determination and continues to liaise with suppliers regarding any concerns they may have with the process, including late payments,” said the company.
Separately, the SBC has recommended that Sambro International, a supplier of licensed merchandise including toys and stationery, should ensure contracts contain payment terms agreeable to both parties after two invoices were paid late by 56 days and 23 days respectively.
In a report the SBC said there was a verbal agreement to pay a £3,150 invoice for graphic design services within 30 days, and these terms were requested for a second invoice of £2,550.
But an investigation by the SBC found standard payment terms at Sambro were 60 days and it was not normal practice to go outside this policy. Uppal recommended verbal agreements should be recorded in writing.
Uppal said: “I often find that administration and personnel issues are used as common excuses for justifying late payments, but large businesses must have a greater focus on continually improving their processes to ensure prompt payment and transparency for small businesses.”
Brian Robinson, finance director at Sambro, said: “We fully understand how hard it can be for small businesses and it was never our intention to cause delay or distress. We have apologised to our supplier and offered to pay interest.”
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