ESRS Standard
ESRS Standard
31 The company shall provide information on its payment practices, in particular in relation to late payments to small and medium-sized enterprises (SMEs).
(32) The objective of this disclosure requirement is to provide insight into the contractual payment terms and its performance in relation to payments, in particular with regard to how these impact on SMEs, especially in relation to late payments to SMEs.
(33) The information referred to in paragraph 31 shall include the following:
(a) the average time (in days) taken by the business to pay an invoice from the date on which the contractual or statutory payment period begins,
(b) a description of the entity's standard payment terms in days, by major category of Supplier, and the percentage of its payments to which those standard terms are applied,
(c) the number of legal proceedings for late payment currently pending; and
(d) any additional background information required. If the company has used a representative sample to calculate the information required under point (a), it must indicate this and briefly describe the methodology used
Application Requirements (AR)
Application Requirements (AR)
AR 16 In some cases, the entity's standard contractual payment terms may differ significantly depending on the country or type of Supplier. In such cases, information about the standard terms and conditions by major category of Supplier or country or geographic region could be examples of additional background information to explain the disclosures in paragraph 33(b).
AR 17 An example of how the disclosures describing the standard contractual terms in paragraph 33(b) might look:
ABC's standard contractual payment terms provide for payments on receipt of invoice for wholesalers comprising approximately 80% of its annual invoices. It pays for the services it receives within 30 days of receipt of the invoice, i.e. approximately 5% of its annual invoices. The remainder of its invoices are paid within 60 days of receipt, with the exception of invoices in country X, which are paid within 90 days of receipt in accordance with marketplace standards.
Examples from past practice
Examples from past practice
Examples are provided only as an indication of how a disclosure requirement has been reported by other companies to date. Audited ESRS reports are not yet available. There is no guarantee of accuracy and completeness.
G1-6 - Payment practices
In order to avoid unfair payment practices, the payment terms for our Suppliers are set out in our General Terms and Conditions, which provide for a payment period of 30 days. Local legal requirements and common practices in the respective regions are taken into account, whereby the periods may vary depending on the market.
Own example
Tabular presentation, paragraph 33 a) and partly b)
This article has been machine translated. In case of errors, please contact [email protected].