To date, Affinity Water has been slow to implement alternative payment terms arrangements under Schedule 3A of the Business Terms of the Wholesale Retail Code. With your assistance, this is a position we would like to change by slowly introducing alternative payment terms which will be of benefit to all parties, which will allow us to monitor and review over time.
We recognise that there is a fine balance between Retailers having to pay Wholesale charges while trying to receive cash in from customers, which can lead to an undesirable cash flow situation.
At the same time, we also see the need for the alignment of due dates, as a combination of factors including MOSL’s published timetable, the Business Terms and wholesaler invoice timetables, creates numerous due dates throughout each month. This phenomenon can be particularly frustrating for a retailer where the water and wastewater services are provided by different wholesalers. This introduces unnecessary waste in both wholesaler and retailer organisations and can contribute to friction between individual trading parties.
The purpose of this consultation is to provide our stakeholders with an opportunity to provide structured feedback on the introduction of our alternative payment terms arrangements.
Our Proposal
The fundamental building blocks of our proposal are simplicity, transparency and proportionality, and through those we hope to reduce and/or eliminate any barriers to entry for retailers.
Core principles of the product:
- It is simple – easy to understand, implement and monitor.
- Eligibility – it will be available to all retailers who fit the eligibility criteria (including new entrants, self-supply and retailers of any size).
- It can be used in conjunction with other forms of eligible credit support.
- It can be terminated by the retailer at any time (in writing).
- It can be terminated by the wholesaler with 30 days’ notice (in writing).
- It will terminate if the retailer is a Defaulting Trading Party.
- It will terminate if the wholesaler has reasonable grounds to believe the retailer will default.
Our Offering:
- For Post-Payers providing credit support.
- Align the due dates of reconciliation invoices (R2 to RF) with R1 invoice, creating a single, multi-line invoice each month.
- Extend the payment terms of the newly aligned invoice by 30 days from the date of the existing R1 due date (60 day terms total).
- Retailer to provide 20 additional days of collateral (70 total).
Have your say
A copy of the full Alternative Payment Terms Agreement is being drafted, but we would like to gain your feedback on our offering.
Please use our online form to submit your responses
If you have any trouble using the online form you are welcome to email your responses direct to wholesale.commercial@affinitywater.co.uk
Please submit your response by September 6th 2024.
Following the conclusion of this consultation and based on your feedback, our intention is to have a draft agreement in place and ready to distribute by October 1st.
We thank you for taking the time to respond to this consultation.