Sanlam signs Prompt Payment Code

The code is an initiative from the National Small Business Chamber (NSBC) which asks government and big corporate companies to commit to paying small and medium enterprises within 30 days of invoice.

Jannie Rossouw, head of Sanlam Business Market, says that the signing of the code is testament to the Group's strong support for small businesses. "Sanlam is a caring corporate citizen and we understand that the growth of the South African economy is in the hands of SMEs as they contribute between 52% and 57% to GDP and employ 61% of the labour force. As a group our standard terms were already 30 days from invoice, but this code reaffirms and formalises our commitment to doing so."

Encouraging best practice

NSBC founder and CEO, Mike Anderson says the organisation sees SMEs going out of business every day, in many cases due to cash flow as a result of late or non-payment. "Prompt payment is vital to the cash flow of every business, and especially to smaller businesses. The Prompt Payment Code is about encouraging and promoting best practice between government, larger organisations and their SME suppliers."

Rossouw offers the following tips for SMEs to ensure they are in control of their cash flow:

• Negotiate payment terms before a deal is concluded: Once the terms are set, it is very hard to change.
  
• Stick to your guns: If a debtor has agreed to 30 day payment terms, hold them to it and begin chasing up the payment as soon as it is overdue.
  
• Be fully in control of your debtor book information at all times: Your systems of tracking monies owed and paid should be very tightly and actively managed so that you are firmly in the driving seat of this aspect of your cash flow.
  
• Invoice on time and accurately: Don't make sloppy accounting work the reason your debtors don't pay on time.