SUPPLIER PAYMENT POLICY

Effective Date: 1^st November 2026

1. Purpose

The purpose of this policy is to establish clear procedures for ordering, invoicing, approving and paying suppliers.

The policy aims to ensure:

• Suppliers are paid accurately and within agreed payment terms.
• All expenditure is authorised before orders are placed.
• Purchase Orders are used to control company expenditure.
• Supplier invoices are correctly submitted and processed.
• Effective cash flow management and financial controls are maintained.
• The company complies with relevant UK legislation.

2. Scope

This policy applies to all employees, departments, suppliers, contractors and service providers involved in purchasing goods or services or processing supplier payments on behalf of the company.

3. Purchase Order Requirements

The company operates a Purchase Order (PO) system.

A Purchase Order must be raised and issued by the company to confirm every order for goods or services before the supplier proceeds with the order.

The following requirements apply:

• Employees must obtain the necessary internal approval before requesting a Purchase Order.
• Suppliers must receive an authorised Purchase Order before commencing work or supplying goods.
• The Purchase Order must clearly identify the goods or services being ordered and the agreed costs.
• The Purchase Order number must be quoted on every supplier invoice.
• Invoices must accurately reflect the corresponding Purchase Order.

Suppliers should not accept verbal orders or proceed with additional work or expenditure without an authorised Purchase Order or written approval from an authorised company representative.

Any additional costs or variations must be approved and, where appropriate, covered by an amended Purchase Order.

4. Supplier Invoice Requirements

All supplier invoices must be submitted electronically to the designated Accounts Payable email address.

Every invoice must include:

• The company’s correct legal entity name and address.
• The supplier’s name and address.
• A unique invoice number.
• The invoice date.
• The relevant company Purchase Order number.
• A clear description of the goods or services supplied.
• Quantities and agreed unit prices, where applicable.
• Net amount, VAT and gross total.
• Supplier bank details.

Invoices without a valid Purchase Order number will not be processed for payment and will be returned to the supplier or placed on hold pending clarification.

Suppliers must ensure that invoices are submitted promptly following the supply of goods or completion of services.

5. Standard Payment Terms

The company’s standard supplier payment terms are 30 days from receipt of a valid and approved invoice, unless alternative terms have been agreed in writing.

Alternative payment arrangements must be agreed and approved by an authorised director or manager before being accepted.

Payment terms will be recorded against the supplier account and applied consistently.

6. Invoice Verification and Approval

Before an invoice is approved for payment, the Accounts Payable team must verify that:

• A valid Purchase Order has been issued.
• The Purchase Order number is quoted on the invoice.
• The goods or services have been received satisfactorily.
• The invoice matches the Purchase Order.
• The agreed prices and quantities are correct.
• VAT calculations are accurate.
• The invoice has not previously been submitted or paid.
• The invoice has received the appropriate departmental approval.

Any discrepancies must be investigated and resolved before payment is authorised.

Employees must not approve their own expenditure where this would compromise financial controls.

7. Weekly Supplier Payment Runs

The company operates weekly supplier payment runs.

Payments will normally be processed once per week, subject to the following:

• Invoices must have been received and correctly submitted.
• The relevant Purchase Order must be quoted.
• Goods or services must have been received and approved.
• All required invoice checks must have been completed.
• The invoice must be due for payment in accordance with agreed terms.
• The payment must have the appropriate authorisation.

Invoices approved after the weekly payment run cut-off may be included in the following week’s payment run.

The weekly payment schedule does not change the agreed contractual payment terms. The Accounts Payable team must ensure that invoices are scheduled in sufficient time to meet their due dates.

Urgent or exceptional payments outside the normal payment run must be supported by a valid business reason and approved by an authorised manager.

8. Payment Authorisation

All supplier payments must be authorised in accordance with the company’s delegated financial authority limits.

The following principles apply:

• All payments must have supporting documentation.
• Payments must be approved by an appropriately authorised individual.
• Higher-value payments may require additional approval.
• Payment approval and payment processing should be separated wherever practicable.
• No employee may bypass the company’s payment authorisation procedures.

9. Payment Methods

The company will normally pay suppliers by:

• BACS bank transfer.
• Faster Payments.
• CHAPS for urgent or high-value payments, where appropriate.
• Direct debit where contractually agreed.
• Other approved payment methods where necessary.

Cash payments should be avoided and require specific management approval.

10. Changes to Supplier Bank Details

Any request to change supplier bank details must be independently verified using a previously established or independently sourced telephone number.

Verification must not rely solely on the contact details supplied in the bank-change request.

All changes must be recorded and approved before being updated in the finance system.

No payment should be made to amended bank details until verification has been completed.

11. Disputed Invoices

Where an invoice is disputed:

• The supplier must be notified promptly.
• The reason for the dispute must be clearly explained.
• The relevant department must investigate the issue.
• Undisputed amounts should be paid in accordance with agreed terms.
• Resolved disputes should be processed without unnecessary delay.

All disputes must be documented and monitored until resolution.

12. Late Payments

The company is committed to paying suppliers within agreed contractual payment terms.

Where a payment delay is anticipated, the supplier should be informed as soon as reasonably practicable, with an explanation and an expected payment date.

Any statutory interest or compensation arising from late payment will be handled in accordance with applicable UK legislation and contractual arrangements.

13. Early Payment Discounts

The company may take advantage of early payment discounts where commercially beneficial.

Such arrangements must be reviewed and approved by the Finance Department, taking account of cash flow and the financial benefit to the company.

14. Supplier Statements and Reconciliation

Supplier statements should be reviewed regularly to:

• Identify outstanding invoices.
• Investigate discrepancies.
• Identify missing credit notes.
• Resolve aged balances.
• Ensure supplier accounts are accurate.

Significant discrepancies must be escalated to the Finance Manager.

15. UK Legal and Regulatory Compliance

The company will operate its supplier purchasing and payment procedures in accordance with applicable UK legislation and regulatory requirements, including the following:

15.1 Late Payment of Commercial Debts (Interest) Act 1998

The company will comply with applicable legislation relating to late payment of commercial debts.

Where applicable, suppliers may be entitled to statutory interest on overdue commercial debts, currently calculated at 8% above the Bank of England base rate, together with applicable fixed compensation for debt recovery costs.

Agreed contractual payment terms will be observed and monitored to minimise late payments.

15.2 VAT Compliance and HMRC Requirements

The company will ensure that supplier invoices contain the necessary information to support VAT accounting and any applicable input VAT recovery.

VAT invoices must be checked for appropriate details, including:

• Supplier name, address and VAT registration number, where applicable.
• Unique invoice number.
• Invoice date and tax point, where required.
• Description of goods or services.
• Net amounts and applicable VAT rates.
• Total VAT charged.

The company will maintain appropriate VAT records and comply with HMRC requirements, including Making Tax Digital requirements where applicable.

15.3 Financial and Accounting Records

All Purchase Orders, supplier invoices, credit notes, approvals, payment records and supporting documentation must be retained in accordance with applicable UK statutory record-keeping requirements.

VAT-related business records must generally be retained for a minimum of six years, subject to applicable exceptions.

15.4 Fraud Prevention

The company will maintain appropriate financial controls to prevent fraudulent supplier activity, including independent verification of supplier bank detail changes and appropriate separation of duties.

16. Fraud Prevention and Financial Controls

The company operates a zero-tolerance approach to fraudulent activity.

Employees must:

• Follow all purchasing and payment authorisation procedures.
• Ensure Purchase Orders are raised before orders are confirmed.
• Protect confidential supplier and banking information.
• Report suspicious invoices or payment requests.
• Never amend supplier bank details without verification.
• Report suspected duplicate or fraudulent payments immediately.

Any suspected fraud must be escalated to senior management.

17. Record Keeping

All supplier invoices, Purchase Orders, approvals, payment records, credit notes and supporting documentation must be retained in accordance with the company’s document retention policy and applicable UK legal requirements.

Records must be accessible for audit and financial reporting purposes.

18. Non-Compliance

Failure to comply with this policy may result in:

• Invoices being placed on hold.
• Orders being rejected or delayed.
• Withdrawal of purchasing authority.
• Further management investigation.
• Disciplinary action where appropriate.

Exceptions to this policy must be documented and approved by an authorised director or senior manager.

19. Policy Review

This policy will be reviewed annually or sooner where there are significant changes to legislation, business operations or financial controls.

Any amendments must be approved by senior management.