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Payment Practices and Performance Reporting Action Plan

This document is produced in accordance with the guidance set out in the UK Government’s Payment Selection & Guidance Document for PPN 04/19 (“Guidance”):

 

Background

Pfizer Limited (“Pfizer”) publishes half-yearly business practice and performance metrics in line with the Small Business Enterprise and Employment Act 2015 (“Regulations”).

In accordance with the Regulations, Pfizer reported that in the period from November 2019 until May 2020 (“Period 1”), Pfizer paid 95.2% of its invoices within 60 days. From June 2020 until November 2020 (“Period 2”) Pfizer paid 80% of its invoices within 60 days.

Compliance with contractual payment terms in Period 1 was 97.66% and in Period 2 was 99.62%.  

The relationships we hold with our suppliers are of great importance to us and we are committed to paying our suppliers in line with payment terms and within 60 days from the date the invoice is received. We monitor payment performance and, at all times, aim to pay over 95% of invoices within 60 days across our whole supply chain and all invoices in accordance with our payment terms.

In line with the Guidance, Pfizer sets out the following action plan to:

  • Provide an explanation as to why fewer than 95% of all invoices were paid in 60 days or less in Period 2
  • Provide details of actions taken to ensure that over 95% of all invoices are paid in 60 days or less.
  • Provide an explanation as to why not all invoices were paid in accordance with the contractual payment terms
  • Provide details of actions taken to ensure that suppliers are always paid in accordance with the contractual payment terms
  • Provide details of regular reporting on the progress of the above actions to Pfizer’s audit committee

This action plan has been approved by a director of Pfizer Limited.

 


 

1. Identification of the primary causes of failure to pay:

a) 95% of all supply chain invoices within 60 days in Period 2:
Two main causes were identified following a detailed analysis:

  1. The COVID-19 pandemic affected our invoice scanning teams operational capacity in the period from March 2020 to August 2020
  2. The relocation of the invoice scanning team required an update to the supplier invoice mailing address, which resulted in delays as invoices were sent to the legacy address

 

b) All invoices within agreed terms.
The main cause identified following a detailed analysis:

  1. The COVID-19 pandemic affected our invoice scanning teams operational capacity in the period from March 2020 to August 2020

 

Actions to address each of these causes.

Cause Remediation
1 (a) Cause 1
The COVID-19 pandemic affected our invoice scanning teams operational capacity in the period from March 2020 to August 2020.
A business continuity process has been put in place to enable remote access. In addition, operational capacity challenges have been addressed with digital ways of working.
1 (a) Cause 2
The relocation of the invoice scanning team required an update to the supplier invoice mailing address, which resulted in delays as invoices were sent to the legacy address.
The relocation of the invoice scanning team location was a fixed duration activity completed in 2020. Pfizer also made email electronic invoicing available to all suppliers in 2020, removing the need for paper invoices to be posted, which should help to mitigate against the impact of any future potential invoice address changes.
1 (b) Cause 1
The COVID-19 pandemic affected our invoice scanning teams operational capacity in the period from March 2020 to August 2020.
A business continuity process has been put in place to enable remote access. In addition, operational capacity challenges have been addressed with digital ways of working.
2. A mechanism for and commitment to regular reporting on progress to the bidder’s audit committee (or equivalent).

A mechanism has been established where Pfizer’s payment performance is reported monthly to Pfizer’s internal audit committee. Payment performance will be reviewed by the internal audit committee to monitor it and ensure over 95% of invoices are paid within 60 days and all invoices are paid in accordance with the contractual payment terms.

 

 

PP-PFE-GBR-3319 / Dec 2020