FSB again concerned about late payment issues for SMEs
4th February 2015 | News
The Federation of Small Businesses (FSB) has once again called on the Government to act about the issue of late payment culture and its effect on small firms.
The FSB believes an independent inquiry is necessary after leading companies from the FTSE 350 and small business owners came together for a round table discussion with Government officials and the Confederation of British Industry (CBI) on the UK’s deteriorating payment culture.
While there was acknowledgment that the Government was trying hard to improve payment culture, the FSB insists an independent report would result in clearer actions to progress late payment and supply chain bullying.
The Federation has been working hard behind the scenes to raise the profile of many of these actions such as ‘pay to stay’, excessively long payment terms exceeding payment agreements, discounts for prompt payment and retrospective discounting.
John Allan, national chairman, FSB, fears the UK’s late payment culture will continue to deteriorate and hamper the growth of SMEs unless ‘bold’ steps are taken.
“Following today’s encouraging meeting, which brought together a wide range of views and stakeholders, the FSB is calling for a wide-ranging inquiry to address late payment and supply chain bullying in one place,” said Allan.
“It must be independently led and produce clear recommendations in time for the next government to act on early in the next Parliament.
“We have already fed back to government on this issue in numerous consultations but without any significant progress yet in tackling the underlying causes of our poor payment culture.”
Allan is fully focused on halting the abuse of SMEs in their dealings with bigger firms.
“We have seen the UK’s payment culture significantly deteriorate in the past five years,” added Allan.
“The gradual creep of payment terms from 30 days to well over 100 days in some cases, coupled with debilitating contract terms, can have a disastrous effect on a small firm’s ability to operate.
“For payment culture to improve, we need fresh thinking and bold steps to be taken.”