Lancashire-based Federation of Small Businesses calls to end curse of late payments
Big business has been put on notice by the Lancashire-based Federation of Small Businesses and warned that they must do more to end late payments, poor payment practice and supply chain bullying that is damaging the UK economy.
A letter from FSB National chairman, Mike Cherry, to all FTSE 100 companies urges chairs and CEOs to take immediate action by agreeing to lead the way in stamping out poor payments for good.
In the letter Mr Cherry calls on these companies to work with small businesses to help foster a new payments culture in the UK. Research from FSB shows the hugely damaging impact these practices have on small firms within supply chains.
It data shows that the vast majority (84 per cent ) of small firms report being paid late.
A third say at least one in four payments they’re owed arrives later than agreed.
A similar proportion (37 per cent) state that agreed payment terms have lengthened in the past two years, hampering cash flow.
Only four per cent say payment terms are improving.
The pressure from small business comes after the release of Parliamentary joint Select Committee report on the collapse of Carillion published last week.
The report laid bare the substantial failures at the company including the squeezing of its suppliers, and the frailty of the Prompt Payment Code.
FSB is calling for a non-executive director on boards to be given a specific responsibility for good supply chain practice including making sure the firm is opting to follow best practice and lead the way.
Mr Cherry, said: “The poor payment practices that run rampant through UK supply chains is a national disgrace with the country falling behind almost all other industrialised nations in our ability to pay small businesses on time.”