Prompt Payment Code Commitment

Integrated Water Services is committed to maintaining fair payment terms for all our suppliers and it is important to us that we pay our suppliers in compliance with our agreed payment terms. In the U.K., we have a statutory duty to report payment practices and performance on a six-monthly basis, as prescribed by Department for Business, Energy & Industrial Strategy Reporting Guidance. This information is published here.

Integrated Water Services monitors the payment statistics continually and reports them monthly to our Senior Leadership Team and our Audit Committee. As part of our commitment to continuously improve our payment performance, we have identified some causes for payments to our suppliers to be longer than they could be. These are:

• The payment calendar for the generation of payment runs was has not been taking into consideration invoices due by the deadline, and as a result a high proportion of invoices have ben paid between 1 and 4 days beyond their contractual terms
• Some invoices from our suppliers are addressed to the wrong Integrated Water Services affiliate thus requiring many processing cycles for clarifications.
• Invoices or Applications received which are in dispute have taken longer to resolve than we would ideally target.
• Our shared accounts payable department hold several records for the same supplier, as are utilized across our sister companies. At times, these hold differing payment terms causing confusion over the final due date for payment.

The actions that we are taking to address these identified areas of improvement are:

• We will implement a revised payment calendar utilizing electronic invoicing to facilitate faster payment to suppliers within their contractual terms, taking into consideration the final payment dates generated via our payment system, and the payment due date for all invoices.
• We will improve proactive communications with the supplier to ensure that all information that is required to pay an invoice promptly is provided, thus reducing processing cycle time
• We will, despite the challenges of having longer terms with our clients, move towards a maximum 60 day payment term for all suppliers.
• We will review all supplier records, consolidating payment terms across our sister companies to remove confusion over differing agreements to ensure the effective processing of payments.
• We will continuously review the impact of these changes and work towards improving the payment performance further against the goal of having 30 days as the norm. The payment performance metrics are reviewed by our Finance leadership and the Audit Committee.

The above action plan is approved by Integrated Water Services Limited’s Senior Leadership Team and is signed by our Managing Director.