Small firms urge bigger counterparts to 'pay promptly'

Date: 8th May 2009

Small businesses have demanded that their larger counterparts sign up to the government's prompt payment code.

The call has been made by the Forum of Private Business (FPB) after it emerged that one major retailer had doubled the amount of time it takes to pay its suppliers to 60 days.

Phil Orford, chief executive of the FPB, commented: "For too long, smaller firms have been squeezed so their bigger customers can create lines of credit.

"The damage being caused by late payment and enforced changes to terms and conditions is huge and many small businesses are facing closure as a result."

Companies which are struggling with cashflow as a result of late payments often turn to accountants for financial advice.

In response to the withdrawal of trade credit insurance by some providers, the government this month launched its own top-up scheme to help small firms protect against defaulted payments.