Etail giant Asos has written to suppliers to implement a new set of payment terms.
Asos has moved all of its branded suppliers to 30 days payment with a 5% discount, in an attempt to simplify its payment system.
In a letter sent to suppliers, Asos product and trading director Rob Bready explained that the business had added more than 400 brands to its roster in the past year, which had burdened it with a confusing and varied array of payment terms leading to delays and complications for Asos’s accounts department.
Bready added that the young fashion etailer was keen to support its suppliers during the downturn. While the new payment terms ask for deeper discounts, quicker payments should ease cash flow difficulties for many brands.
Bready said in the letter: “To bring simplification…to the processing of payments we are going to apply our standard terms to all accounts. We will not seek to alter these payment terms in any aspect over the next 12 months. This clarity will provide you with, we believe, at least one area of financial certainty this year.”
One supplier said: “This isn’t too much of an issue for suppliers. It’s swings and roundabouts. You get paid more quickly, which is good for those needing cash, but you do take a slightly bigger hit as a consequence.”