Annual Expense Analysis

The Annual Expense Analysis is the single most consequential piece of work in joining Silvatree. It produces your Total Acceptable Expenses, from which you elect your Declared TAE, and Declared TAE sets your Joining Fee, your monthly Throughput Fee, your Trading Headroom Limit and your Earning Cap.

Because so much follows from it, this document sets out exactly how it is done, so that nothing about the figure that ends up in your contract is a surprise.

1. What it is

The Annual Expense Analysis is an assessment of your annual business expenditure, category by category, identifying which of it could suitably be exchanged on the platform (Clause 1.1).

It is completed collaboratively between you and a Capacity Consultant during the Suitability Call. At later periodic reviews it may be completed with an AI System, with human escalation available (Clause 4.2(a)).

You provide estimated annual expenditure for each category. We identify which categories are suitable for exchange and which are not. The suitable categories, added together, are your Total Acceptable Expenses (TAE).

2. From TAE to Declared TAE

TAE is what you could route through the platform. Declared TAE is what you elect to route through it over the following twelve months (Clause 4.3(b)).

They are not the same figure and they are not meant to be. Nobody moves their entire addressable spend onto a new platform in year one.

The election is yours (Clause 4.3(d)). We may recommend a figure from the analysis, and we may decline an application or ask for a different figure where the one you have elected is materially inconsistent with your apparent trading capacity — but we do not set it for you, and a Capacity Consultant has no authority to set it for you either. See section 5 of the Platform Rules.

Declared TAE then drives everything, through the formulas published in the Fee Schedule and the Trading Headroom Guidance.

3. Categories excluded from the calculation

Clause 4.2(b) excludes categories that are typically not suitable for exchange. This section is that list.

Exclusion works in your favour. An excluded category is taken out of TAE, which lowers the figure your fees are calculated from. There is no incentive for us to under-exclude, and if you think something has been wrongly included you should say so during the call.

3.1 Structurally excluded — permanently

These are payments to government or statutory bodies, or internal to your own business. The recipient cannot be a Silvatree Member in principle, so these will not become supplyable.

3.2 Currently excluded — under quarterly review

These are categories the network does not cover today. Each could become supplyable when a suitable supplier joins, at which point it comes off this list and counts towards TAE at the next review.

We review section 3.2 at least quarterly. When a category comes off, existing Members see the effect at their next Annual TAE Review — we do not re-rate anyone mid-year because the network grew.

3.3 Anything not listed

Any category not listed in section 3.1 or 3.2 counts towards TAE. These lists are exclusions, not an allowlist of what the network covers. If your spend is on something not named here, it is treated as addressable.

4. Supporting documentation

We may request supporting documentation for any expense estimate (Clause 4.4(b)). In practice we ask where an estimate is materially out of line with what the analysis as a whole suggests, or where a single category drives most of the TAE figure.

What we ask for is proportionate: management accounts, a recent set of filed accounts, a VAT return, or supplier invoices for the category in question. We do not ask for bank statements, and we do not run credit reference searches — see section 3.1 of the Trading Headroom Guidance.

You warrant that what you tell us is accurate and complete to the best of your knowledge (Clause 4.4(a)). Material misrepresentation of expenses in order to obtain a Joining Fee or a Trading Headroom Limit you would not otherwise qualify for is a material breach and grounds for termination under Clause 29 (Clause 4.4(c)).

5. The periodic review

Your Annual Expense Analysis is reviewed periodically, and your Declared TAE is reviewed with it (Clauses 4.2(c) and 4.3(e)).

The review itself is free of charge, and it is the moment at which:

• your expense categories are refreshed, including any category that has come off section 3.2;
• you re-elect your Declared TAE for the year ahead;
• your Trading Headroom Limit and Earning Cap are re-sized from the new figure; and
• the Annual TAE Reconciliation runs, comparing your actual volume against what you declared. That reconciliation, its 15% tolerance and its worked examples are in section 4 of the Fee Schedule.

Where you have traded above your declaration, your Declared TAE for the following year is automatically re-rated to at least last year's actuals.

Failure to complete a periodic review within 30 days of its due date may result in temporary suspension of trading on your account until it is completed (Clause 4.2(c)). Nothing is charged for the suspension and it lifts as soon as the review is done.

6. Your record

The completed Annual Expense Analysis forms part of your member record. It is personal data where it identifies individuals, and it is covered by the Privacy Notice and by Part J of the Terms. Your rights of access, rectification, erasure, restriction, objection and portability under UK GDPR Articles 15 to 21 apply to it (Clause 46.3).

Keeping it current and accurate is one of the conditions of Good Standing at Clause 1.1, and one of the eligibility conditions for the Service Satisfaction Guarantee.