Discloses Policy on Up-Front Supplier Payments
About the data
Purchasing practices are the way that a company interacts and does business with the manufacturers that supply their products. It encompasses strategic planning, sourcing, development, purchasing (buying) and the underlying behaviours, values and principles which impact workers. Disclosure of payment terms is important because it helps suppliers plan and as they front the costs of production (in most cases) having this information better enables rompt and fair terms of payment helps suppliers with cash flow enabling them to pay workers on time and adequately.
Methodology
In this question you are being asked to identify whether the company discloses a policy on what % of the purchase order the brand typically pays to the supplier up front before production begins.
Where to look for this information:
- Corporate Social Responsibility report
- In Modern Slavery Statement or
- California Transparency Act disclosure
- Company documents
- Company policies
- Company websites
- Company code of conduct
- Parent company documents (only if the parent company is linked to from the brands website)
- Parent company policies (only if the parent company is linked to from the brands website)
- Parent company websites (only if the parent company is linked to from the brands website)
- Parent company code of conduct (only if the parent company is linked to from the brands website)
Good keywords for your searches include:
- On-time
- Purchase Order
- Purchasing Practices
- Payment terms
Things to keep in mind:
- Extended and long payment terms can impact a supplier’s ability to provide decent employment conditions
- Long payment terms mean suppliers have to 'front' the costs of raw materials, often buying them on credit