Balfour Beatty has announced the beginning of a voluntary finance scheme for its UK supply chain, which could enable them to receive payment weeks faster than before.

Initially utilised by Balfour Beatty's UK construction business, the scheme, which will be rolled out on a phased basis across the UK, will offer support to the small and medium sized businesses Balfour Beatty works with and help alleviate potential cash flow issues by providing access to low cost funding. Supply chain partners will be able to access funds as soon as invoices are approved, within their existing payment terms.

An online portal, which operates much like an internet banking solution, gives the supply chain early visibility of payment status and therefore the ability to better manage cash flow.

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Since March this year, Balfour Beatty has been carrying out a successful pilot of the scheme with a number of subcontractors. Following their feedback, the functionality of the portal has been further improved to ensure it meets the wider supply chain's needs.

Jim Galvin, Director of One Four Four Ductwork, based in Liverpool, who took part in the pilot scheme, commented: "For a medium sized business like ourselves, this facility is providing us with valuable and much needed access to funds which has given us the ability to release payments to our own supply chain further down the line quicker than anticipated.

"The system itself is easy to use and monitor and is extremely attractive to businesses like ours. I would not hesitate in recommending the system to other members of Balfour Beatty's supply chain."

Balfour Beatty, in partnership with two UK banks, has arranged the facility and has also made a significant investment in the IT system to facilitate the scheme.

Suppliers who sign up to the scheme will be able to access payments as soon as Balfour Beatty approves their invoice. Once the invoice is approved, it is then automatically uploaded on to the bank's internet platform. The supplier can then log in and access their fast track payment – less a small interest charge per payment, which is significantly lower than rates that small and medium suppliers can receive in the market. The interest generated will be used to cover the scheme's costs and will not generate net income for Balfour Beatty.

(CD/JP)