Chapter 04 · People & supply chainsSupply Chain & Due Diligence
Payment practices
Definition
Payment practices are the policies, contract terms, operational processes and actual performance through which an organisation approves and settles amounts owed to suppliers and other business partners, including payment periods, delays and dispute handling.
References
This reference provides supporting context for how “Payment practices” is defined and used.
Overview
How it is used
In professional practice, “Payment practices” helps employers, buyers, suppliers, governments, workers and affected communities describe or assess the contractual terms, actual timing, controls and conduct governing how an organisation pays suppliers and other business partners. It is commonly encountered in workplace policy, sourcing, human-rights due diligence, community engagement and supply-chain management.
A credible application identifies the affected population, supply-chain boundary, local context, timeframe and evidence from rights-holders.
Why it matters
The practical importance of “Payment practices” lies in the decisions attached to it. It can affect whose rights, needs, risks and experiences are recognised in decisions; the term should therefore be supported by evidence proportionate to the claim or decision being made.