Three-quarters of Small Businesses Still Paid Late
Almost three-quarters of small firms were paid late last year, research from the Federation of Small Businesses (FSB) has highlighted.
The survey also revealed that 77% of late payments to small firms were from other businesses, not from the public sector.
“In the current economic climate every penny counts and for small businesses a late invoice can mean not being able to pay their staff.”
said FSB chairman John Walker.
“All businesses need to ensure that they make payments on time if the private sector is to get on with the job in hand of strengthening the recovery.”
Walked added that small firms could help prevent late payments by having a contract in place confirming payment times, offering a discount for prompt payments where appropriate and ensuring that all sides know payment terms from the start.
Cabinet minister Francis Maude recently called on big business to pay bills promptly:
“The Government has an excellent record at paying its bills quickly and we expect our suppliers to do the same and pay sub-contractors well within the 30-day limit.”
“We will be keeping a close eye on how the big suppliers choose to pay their sub-contractors and we won’t shy away from naming and shaming those that have failed to pay promptly.”
A spokesman for the Department for Business Innovation and Skills said:
“Research shows that over half of all UK transactions take place with no pre-agreed payment terms and that 90% of suppliers fail to credit check their customers regularly.”
“There are now more than 1,000 organisations, including 32 members of the FTSE100, signed up to the Institute of Credit Management’s prompt payment code. Where companies are found to have breached the code, they can have their membership cancelled. The Government supports this industry-led approach in which suppliers are in a position to support membership applications and report any failings.”