11 July 2011

Credit policy - a blank sheet of A4

Mr Mustard has previously blogged about the short credit terms which suppliers have obtained which are not conducive to the proper checking of invoices. Mr Mustard has now obtained the official policy of Barnet Council. It is:-

The Council does not have a policy that deals specifically with the negotiation of credit terms with suppliers of goods and services,
i.e. a blank sheet of A4 paper.

So it seems probable that whatever term the supplier offers gets accepted and a supplier is not likely to offer a long time for payment to be made.

The Council spend more than £70million a month. If they got even half of it onto an "end of month following" payment term, the most common term, they would have £35million more of our money in the bank all the time on which interest would be earned which would help to close the budget shortfall. 

Mr Mustard thinks that the Procurement service is a complete disaster and needs to sharpen its pencil pretty soon.

Yours frugally

Mr Mustard

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