FSB calls for big companies to take action on late
payment
Large companies are squeezing small suppliers by delaying payment by up to four months, the Federation of Small Businesses (FSB) has claimed.
The business lobby group estimates that around 4,000 business failures were caused by late payments last year, while one in three of its members are waiting longer to be paid since the onset of the financial crisis.
Its list of notoriously late payers includes several household names, some of which reportedly postpone paying invoices by more than 90 days.
The FSB has now written to these companies, urging them to sign up to the Prompt Payment Code. It is also calling for Companies House to be given powers to name, shame and fine late payers.
‘Poor payment practices in both the public and private sector can
drastically affect cash-flow for small firms at a time when business owners are
doing their best to hold on to precious funds,’ said FSB National Chairman,
John Wright.
He added: ‘Larger organisations must be given a loud and clear message
that they must stop using the recession as an excuse to use small firms as
source of credit.
‘The FSB would like to see as many private and public sector
organisations as possible signed up to the Prompt Payment Code to ensure we can
put an end to this plague and change the culture of late payments for good.’
More information on the Prompt Payment Code can be found here: