August 10, 2012
The Government has joined forces with business bodies to tackle the on-going issue of late payment — a damaging trend that threatens small businesses across the UK.
According to the Department for Business, Innovation and Skills (BIS), Britain's small and medium-sized enterprises were owed £33.6 billion in overdue payments as of November 2011. Now all the members of the Small Business Economic Forum (SBEF) — including the CBI and the British Chambers of Commerce (BCC) — have agreed to encourage their members to commit to paying small suppliers on time.
Mark Prisk, business and enterprise minister, and chair of the SBEF, said: "Working with industry bodies to encourage their members to sign the Prompt Payment Code (PPC) and commit to making payments on time is a significant step forward. We mustn't be complacent and stop here but I hope to see businesses across the country joining us to help ensure payments are reaching suppliers on time."
The Prompt Payment Code is administered by the Institute of Credit Management (ICM). Philip King, chief executive of the ICM said: "Prompt payment and treating suppliers fairly needs to become part of our business culture. Our advice is that suppliers should not be bullied into accepting unfavourable terms from their customers, and they should negotiate payment as part of the bigger trading relationship."
Phil Orford, chief executive of the Forum of Private Business (FPB) added: "Late payment forces businesses to close, plain and simple. We need more large companies at the top of the supply chain to commit to the principle of prompt payment, to understand that squeezing their suppliers out of business ultimately means less choice for customers. But small business owners also have a responsibility to address late payment by implementing cashflow management as a standard business processes."
The statement signed by the SBEF encourages their members to:
To date, 1,115 businesses have signed up to the PPC. Businesses can sign up now at www.promptpaymentcode.org.uk.