SOLLY Mothabela knows all about late payments. He used to do work for government and would sometimes wait up to 90 days after he completed a job for payment to be made. But when he became a supplier to Nedbank they paid him within seven days of him invoicing them.

Mothabela, who runs courier company Gusfro Express Services, said this was a “huge plus” for his business, especially when it came to managing his cashflow.

Mothabela is one of the increasing number of small suppliers that is able to get better payment terms from corporates.

Other small enterprises are claiming valuable mentoring and business support from their corporate clients, as corporates can score points under the Black Economic Empowerment (BEE) codes if they assist black-owned or empowered enterprises.

The financial sector is one sector which is moving fast to support their small suppliers, either through preferential payment terms or through offering mentoring and business support.

Chris Mamabolo (pictured above), Nedbank Group’s general manager for procurement, said last year 53% of the group’s spend went to BEE companies.

The company aims to channel 10% of this year’s procurement spend to enterprises which has an annual turnover of R35 million or less. He expected this target to be met.

Patsy Down, head of FirstRand’s Transformation Unit, said the banking group also made early payments to its small suppliers and had a coaching programme for these suppliers in place, but would not divulge any further details on these, saying it was a “trade secret”.

FirstRand last year channelled 49% of its overall spend to BEE companies, exceeding its target of 42,5%.

Heather Lowe, head of Enterprise Development at FNB said the procurement unit mined its supplier database and then passed onto its commercial segments details of those suppliers it thought required additional business support.

Lowe said business support, which was not only restricted to its suppliers, but was also offered to its customer base, included access to its Biznetwork seminars, mentorship fund, software and accounting system.

Absa also has special payment terms, but did not give details. Last year the bank spent 63% or R4,2 billion of its total procurement on BEE suppliers. The bank also has a mentorship programme and an incubation fund.

Standard Bank, which last year spent 57% of its procurement on BEE suppliers, has a programme called the BSME to assist small suppliers (see accompanying story).

Meanwhile Sanlam is in the process of partnering with a university to put together a programme to offer business support and financial literacy to its suppliers.

Trevor Chandler, head group sustainability manager, didn’t want to give more details as the deal had not yet been finalised.

Chandler said the insurance group currently offers both its clients and suppliers access to Business Partners’ mentors for support. He said last year Sanlam achieved its target of channelling 50% of its spend to BEE companies.

Sanlam doesn’t yet have specific payment terms for small suppliers, or a specific unit to oversee small suppliers, but Chandler said the insurance company was looking at its procurement policy.

The company has also assisted its own staff to start up businesses to which it has outsourced work.

Mothabela can be contacted on 011 394 7746.