Supplier Financial Relationship Policy & Guidelines INDEX 1.0 CVS OBJECTIVE 2.0 2.1 2.2 2.3 2.4 2.5 2.6 2.7 2.8 2.9 2.10 2.11 GENERAL MERCHANDISE PAYABLE POLICIES Credit Checks 2.12 Debit Balances Supplier Set-up 2.13 Limited Purchase/Seasonal Factors Suppliers Billing Requirements 2.14 New Suppliers/New Items Billing Media 2.15 Supplier Correspondence Payment Terms 2.16 Guaranteed Sales Payment Methods 2.17 Product Return Process Remittance Advice 2.18 EDI Transmission Types Deductions 2.19 Supplier Press Releases Post Audits 2.20 Price Protection Administrative Processing Fees 2.21 Miscellaneous 3.0 3.1 3.2 3.3 MERCHANDISE PAYABLE POLICY – PO/Warehouse Receipts Purchase Orders 3.4 Billing Requirements Shipping Requirements 3.5 Disputed Items Receiving 4.0 4.1 4.2 4.3 MERCHANDISE PAYABLE POLICY – Direct Store Delivery (DSD) Background 4.4 Billing Methods Supplier File Administration 4.5 Product and Delivery Standards Delivery/Store Receiving 4.6 Supplier Drop-Shipment Procedures 5.0 5.1 5.2 5.3 5.4 5.5 5.6 5.7 5.8 NON-MERCHANDISE PAYABLES POLICY Credit Checks 5.9 Supplier Set-up 5.10 Warehouse Consumables Suppliers 5.11 Cash on Delivery 5.12 Billing Requirements 5.13 Freight Charges 5.14 Payment Terms/Deductions 5.15 Deductions 6.0 IDENTIFYING INFORMATION, REFERENCES, & FORMS Supplier Policy 2022 revised 01/19/22 Taxes Post Audits Debit Balances Supplier Correspondence Disputed Items Stop Payments Supplier Holds Page 2 of 40 6.1 6.2 6.3 6.4 6.5 6.6 6.7 6.8 Trade References Bank Reference Hotel References Identifying Information Key Bank Authorization Warehouse Locations Supplier Financial Evaluation Form Supplier Hold / Release Procedures 6.9 6.10 6.11 6.12 6.13 ACH Open Letter ACH Add/Change Form Warehouse Supplier Information eSettlement Security Authorization Form New Supplier Information Form & Instructions 1. CVS OBJECTIVE CVS Health will pay for the merchandise, services, and other assets received at the negotiated costs, allowances and agreed upon terms. The attached requirements have been established to provide suppliers with CVS policies and expectations as they relate to the payments, supplier billing standards, returns, disputes, and electronic data interchange (EDI). Conformity to stated required methods of billing, routing and delivery of invoices, and subsequent payments based on the CVS issued purchase orders; all insure the most efficient and accurate interface to CVS payment systems. CVS Health objectives are:  Accurate payment to suppliers for product and services provided CVS.  Timely payment to suppliers within agreed upon payment terms.  Reduction of CVS accounts payable operating costs.  Prevention of supplier inquiries regarding payments.  Timely resolution of supplier initiated payment issues. Any issues concerning compliance with elements of this document can be directed to the Director of Accounts Payable at CVS in writing. 2. GENERAL CVS PAYABLES POLICIES 2.1 CREDIT CHECKS New Supplier The Finance Department has access to credit information from various sources. Prior to entering a business relationship, a credit check by Finance will be performed on all new suppliers. This review will incorporate the following:  Supplier completed CVS Supplier Information form (See section 6.13 for link)  Supplier completed CVS Supplier Financial Evaluation (See section 6.7 for form)  Finance inquiry and analysis supplied by third party, or equivalent  Finance Department evaluation by the Accounts Payable Manager  Notification document to Category Management for rejected or questionable supplier evaluation  Actions and recommendation to Category management, such as full or partial supplier payment holds to be taken for questionable suppliers  The Accounts Payable Manager will complete all reviews within four working days of receipt of the submitted forms Existing Supplier The Finance Department will periodically conduct reviews of existing CVS suppliers to determine credit worthiness in an effort to reduce the potential losses associated with receivables embedded in the supplier’s accounts payable balance. The results of these reviews will be communicated to the CVS merchandising executive team for action as deemed appropriate. 2. 2 SUPPLIER SET-UP New Supplier The following items are prerequisites to any payment being made to a New Supplier:  The supplier must complete the CVS Supplier Information form and return the completed form to the Category Manager. This form

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