Dell defends payment term shift

Vendor explains reasons behind policy change after being inducted into FPB's Hall of Shame

Time to pay: Dell claims many small firms will still enjoy payment terms of 20-45 days

Dell has hit back at suggestions that its revised payment terms could hit small businesses in the pocket as it seeks to clarify the reasons behind the change.

This week the Forum of Private Business (FPB) placed Dell into its Hall Of Shame after the vendor informed a number of suppliers it was increasing payment terms from 50 days to 65 days. But the Texan hardware giant has stressed that the move represents a standardisation, with terms for many suppliers already standing at 65 days.

The change applies to "non-production procurement", and affects suppliers including telcos, insurers and services firms. The 65-day standard has long applied to "production procurement", said Dell.

The vendor added that the change will not apply to "certain exempted diverse suppliers". This includes "many certified small vendors", which will typically be paid between 20 and 45 days.

Dell also said the standardisation will also not apply in countries where there are restrictions, such as France, Japan and India. Other countries where "credit costs are extremely high" – including Brazil – will also be exempt.

The FPB's Hall of Shame hunts out and exposes firms that change supplier terms. Dell takes its place alongside an array of high-street perennials, including Boots, Argos and Matalan.