Big businesses 'failing to take payment code seriously'

Date: 14th May 2009

Big businesses are refusing to take the government's prompt payment pledge seriously, it has been suggested.

The Forum of Private Business (FPB) has accused larger firms of squeezing their suppliers by not paying within contractually obligated times.

As a result, more and more smaller firms could find themselves with cashflow difficulties and turning to a small business accountant as a result.

Commenting on the government's Prompt Payment Code, chief executive of the FPB, Phil Orford, said: "The problem has not been the initiative itself but the attitude of big businesses towards it.

"Not only are many of these companies failing to acknowledge the principles of better payment practises … they are refusing to account for their actions at all."

He added that the actions of FTSE 100 firms could potentially undermine the government's efforts.

Major corporations which have already signed the pledge include Sony UK, Barclays and DIY specialist B&Q.