The Federation of Small Businesses Tackles Late Payment Issue with Parliament
Cross-party roundtable assembled to discuss solutions to supply chain bullying
The Federation of Small Businesses (FSB) co-hosted a meeting with cross-party members of parliament this morning to confront the growing number of poor payment policies that are negatively effecting small and mid-sized businesses.
The cross-party parliamentary roundtable took place today (January 20) with the FSB, who co-hosted with the All Party Parliamentary Group for Small Business (APPGSB), arguing the need for the government to evaluate payment issues and for larger corporations to be held responsible for their actions.
According to the FBS, poor payment tactics that must be addressed include ‘pay to stay’ flat fees; excessively long payment terms; ‘late payment’ exceeding payment agreements; ‘one for you, one for us’ discounts for prompt payment, and ‘balance sheet bonus’ retrospective discounting.
Recent FSB research revealed that one-in-five small businesses are subjected to one of the above, with the business organisation also shaming large corporations like Premier Foods and 2 Sisters for introducing ‘pay to stay’ practices (whereby traders must pay a flat fee to remain on the supplier list).
The assembly is welcome news for small and mid-sized businesses as over a quarter cited late payment as a major concern and barrier to their growth last year, and an additional report revealed that small and mid-sized firms are the worst affected by late payments .
MP Debbie Abrahams, who is the host of the event, emphasised that it’s both the responsibility of the government and business leaders to ensure changes are made:
“Late payment is something that CEOs and board members in big businesses can influence and I have always maintained that a late payment culture in a company is set at board level.
“That makes it a leadership issue and it’s time that deliberately paying late, finding ways to pay late, or making unilateral changes to pre-agreed contracts is seen as being as unethical as tax evasion.
“As politicians we must work to change business culture and make it unacceptable to pay contractors late as well as shifting the burden of having to take legal action away from the victims of late payment practices once and for all.”