Industry sector: Business services

Waste collection: Payments to creditors


When you pay for services and supplies on account instead of paying cash there and then, your suppliers are your creditors until you pay them. 'Payments to creditors' include the regular payments you will make every month or so to your main final disposal site/s. These are often landfill sites. They might be local authority owned sites or licensed privately operated ones.

Note that your landfill disposal costs will include a landfill tax. This is levied per tonne and will normally be worked out on a per-load basis using an on site weighbridge. There are two rates of landfill tax, a lower rate for inert waste (inactive material like rubble that doesn't degrade) and a much higher standard rate for all other taxable waste.

For maximum convenience you will probably aim to set up an account with your main disposal site/s. You may need to use several different sites, according to the type of waste that you are disposing of in each case. Many sites do offer account facilities to regular users such as skip hire businesses, but some sites work on a cash payment only basis.

You might also buy items in bulk like recycling sacks to supply to customers to whom you provide a recycling service.

Enter in your cash flow forecast the payments you will make to your creditors (including VAT and landfill tax) in the months in which you will pay them.

Setting up an account

To set up an account you may be asked to provide bank and trade references. Until the account facility has been granted you will have to pay for your order at the time you place it. This is known as paying on a pro forma basis.

Once your account has been set up you will be invoiced at regular intervals and expected to pay within a certain number of days of receiving the invoice.