Shorter payment terms have given BHP’s suppliers the flexibility and cash flow to remain in business despite the economic toll inflicted by the coronavirus pandemic.
Aqueous Consulting, Structural Integrity Engineering and Jarah Corporate have provided their services to BHP for a combined total of 28 years and are among the beneficiaries of BHP’s move to pay all outstanding invoices and reduce payment terms from 30 days down to seven.
Our small, local and indigenous businesses play a critical role in supporting our operations and we depend on their ongoing success and prosperity. We estimate that our accelerated payment program will put $100 million directly into the pockets of our small business partners, and we’re starting the see the benefits of the reduced payment terms flowing through to our local suppliers.
Aqueous Consulting is a three-person business in Perth who have been providing its water engineering services to our iron ore operations for over five years.
Shane Farquharson, Director and Principal Engineer at Aqueous Consulting said the new commercial arrangements came as a welcome relief to the business.
“The change to shorter payment terms came totally unexpected but it’s been a significant help to our cash flow as we rely on other sub-consultants to deliver our services”, he said.
“This has significantly reduced the stresses of operating a small business and it also allows us to pursue additional opportunities in this uncertain market”.
Doug Hawkes, Managing Director of consulting firm Structural Integrity Engineering has also welcomed the shortened payment terms.
With a presence in Brisbane, Perth and Newcastle, Structural Integrity Engineering has been providing their risk management services to BHP’s operations for over 20 years. Doug said the reduced payment terms have given the business more flexibility.
“The COVID-19 outbreak has been a worrying period for the business”, he said.
“Cash is king, and having the money in the bank earlier has allowed us extra flexibility, which goes a long way to ensuring our eight employees remain employed throughout these challenging times”.
For Jarah Corporate, a small health, safety, training and risk management business in Brisbane, cash flow was also a concern.
Jarah Corporate has provided expert training assistance to our coal sites across Queensland for three years, and Director Anthony Beasley said the new payment terms have given the business some extra breathing space.
“The proactive approach to fast-track payments has helped alleviate our concerns related to cash flow”, Anthony said.
“It not only allows us to breathe a bit easier and continue our new version of business as usual in the current global environment, but it’s given us a bit more freedom to cast our eyes toward the future”.
Discover some of the other measures we’ve implemented to reduce the burden on our supply partners from BHP’s Group Procurement Officer Sundeep Singh in the latest edition of Prospects.