Slow Payers Sign Up to Prompt Payment Code
The Forum of Private Business (FPB) has said that slow payers, with payment terms of as much as 90 days, are signing up to the Prompt Payment Code (PPC).
Examples of slow payers signing up to the PPC include corporate giant Unilever who, despite being the third largest consumer goods company in the world by turnover, still have a 90 day payment plan which has been in place since 2010.
Supermarket giant, Sainsburys, who had contractually upped their payment times to 75 days late last year, have also agreed to sign up to the voluntary PPC.
Last year Business and Enterprise Minister Michael Fallon wrote two rounds of letters to FTSE 100 and FTSE 250 firms, asking them to sign up to the voluntary code of good conduct.
The FPB has said that slow payers signing up to the PPC, whist not technically breaching the eligibility requirements, does undermine the spirit of the code.
The FPB’s Chief Executive, Phil Orford, was clearly very upset at slow payers signing up to the prompt payment code:
"We feel big businesses are cynically using the Prompt Payment Code to boast of their ethical credentials to the wider public, when in fact they are anything but to their suppliers. No one in their right mind can think Unilever’s 90-day payment terms are ‘prompt’, so why should they be allowed to sign the Prompt Payment Code? It’s a ridiculous situation which has to stop."
Continuing in his damnation of the big businesses, Orford continued:
"Companies like Unilever and Sainsbury’s are hoodwinking the public for their own PR purposes by signing, while the small firms who supply them see absolutely no change to cripplingly long payment times."
Upon Michael Fallon’s initial approach to the top companies only 25 out the FTSE 100 and 5 of the FTSE 250 signed up to the Prompt Payment Code. Fallon even suggested at one time that those businesses who failed to sign up to the code should be named & shamed.
Phil Orford’s skepticism continued:
"There’s absolutely no doubt that we are going to hear of a number of big name brands agreeing to sign the Code ahead of Mr Fallon’s announcement, but if these firms aren’t prepared to decrease their payment terms then quite frankly what’s the point them signing?"
The FPB believes that invoices should be paid at the end of the month of the invoice is issued or, at the very latest, by the end of the month after but that 30 days is ample time in which big firms should be paying small businesses.