Small firms lack confidence in late payment rules
Small businesses do not trust the Prompt Payment Code (PPC) to effectively tackle the UK's poor payment culture, according to research by the Federation of Small Businesses (FSB).
The survey of FSB members finds that 79% of small firms don't believe that the industry-led PPC can reduce late payment and unfair terms, suggesting a widespread lack of confidence in the system.
Many businesses continue to experience problems with late payment. 39% of firms reported they had been offered payment terms longer than 30 days, and 43% said customers had paid more than 90 days beyond the agreed payment date.
FSB members were asked for the reasons for late payment provided by customers:
• 49% said that no reasons were given
• 35% reported delays when processing the invoices
• 34% said the customer had unilaterally extended the payment
• 33% had been paid late because of a lost invoices
• 31% had never received an invoice.
The FSB is calling for a full independent inquiry into the UK's payment culture, supported by 60% of surveyed member firms.
Nigel Holland from Holland & Co Chartered Accountants said:
“ When payments to businesses are late this causes a knock on effect which makes it difficult for firms to function.
Excuses are often made by the firm which is making the payment but these can often be spurious reasons which hide a bullying culture. Unfair practices such as late payments, arbitrary discounts and supplier list fees are undermining the UK economy and should be stopped.”
We can advise on the best ways to combat late payment. Contact us today.
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