Coronavirus leads Danone to speed up supplier payments

By James Ridler contact

- Last updated on GMT

Danone will speed up supplier payments through a new system provided by C2FO
Danone will speed up supplier payments through a new system provided by C2FO

Related tags: coronavirus, Dairy

Coronavirus’ impact has prompted Danone to speed up payment to its suppliers via a new platform supplied by C2FO.

Through the new service, suppliers – including those based in the UK – can get paid within 26 days, less than half the average 60-day threshold currently experienced by many companies globally.

The system works by allowing C2FO to handle invoices on behalf of Danone, enabling suppliers to offer discounts in return for a faster rate of pay, while still effecting direct payment from the manufacturer.

C2FO’s technology is designed to be synchronised with the existing management software without changing processes or payment methods to the vendors. As soon as the discount proposed by the supplier is accepted, the invoice is paid automatically, directly by the buyer, without any change to the existing settlement process.

Faster payments

At a time where cash is tight for these suppliers, the option to get payments much faster could be seen as a major benefit to their businesses.

Commenting on the new service, senior vice president of corporate finance, control and services at Danone Yves Pellegrino said: “It is imperative for Danone to support its suppliers in their financing needs. Fortunately, C2FO allows us to make the most of our customer-supplier relationships, by implementing a flexible solution for us and personalised financing for them.

“The use of a digital solution is an advantage that will strengthen our links with our partners in a secure and efficient environment.”

Pellegrino also noted that the use of the new system complemented Danone’s existing €250m (£217m) liquidity facility, which it has offered to the most weakened suppliers and customers during the Covid-19 crisis.

Optimised cash flows

C2FO managing director Antoine Trépant said its existing customers had already experiences greatly optimised cash flows as a result of implementing the system.

“Our tool is particularly valued in the current liquidity crisis, born out of the Covid-19 epidemic, even as governments and central banks try to contain it as best as possible,”​ Trépant added.

Meanwhile, responding to coronavirus’ impact, the British Frozen Food Federation has urged retailers to share financial aid with their suppliers,​ as manufacturers increasingly rely on debt to weather the pandemic.

In an open letter to the customers of its members, the organisation asked that any Government support they received from the £3bn of grants transferred to local authorities be passed up the supply chain.

Related topics: Dairy, COVID-19, Operations

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