The GCA has announced that eight key retailers have decided to limit the period in which they forensically audit their suppliers accounts.
For considerable time retailers have employed the use of third party, "no win no fee" companies to forensically examine their suppliers accounts in an attempt to find discrepancies such as overpayments, missed payments, going as far back as six years of trading. This has led to occasions whereby suppliers are faced with huge charges by the retailers amounting to many thousands of pounds.
The voluntary commitment reached with retailers Aldi, Asda, Co-op, Lidl, Iceland, Marks and Spencer, Tesco, Morrisons will considerably reduce the burden on suppliers in responding to claims from retailers. This is because after a long interval, the documentary audit trail can be complex and require considerable effort from suppliers, particularly in some cases where key personnel have moved on. Claims can also prove very costly to refute, causing adverse financial consequences to the supplier.
The Adjudicator Christine Tacon said: "I am delighted that eight of the large retailers have taken on board the concerns I voiced about the impact on suppliers - particularly small suppliers - being asked for sometimes significant sums of money several years after they have closed their accounts for any particular year. This is a major change from the previous position where both retailers and suppliers were looking for missed invoices and payments going back up to six years – even longer in some circumstances. Each retailer will now set out how they will implement this commitment."
Read more ...
- The GCA's annual report can be read here.
- A survey on suppliers thoughts towards the GCA and retailer behaviour can be read here.
- Report breaches of GSCOP here.
It is worth noting however, that retailers and suppliers alike will retain their legal right to go back up to six years for missed claims if they so wish.
At the same conference Christine Tacon announced that as well as forensic audits the other issues are; drop and drive where there are discrepancies between what suppliers say they have delivered and what the retailers say has been received, forecasting/service levels, requests for lump sum payments and packaging/design charges. Some of these issues will be a key part of the GCA's programme for the coming year.