Government proposals to tackle late payment
29 January 2015
Large companies could be forced to publish information about their payment practices, under government proposals designed to combat late payment.
The measures would oblige large businesses and companies listed on stock markets to:
- issue quarterly reports on payment performance
- make public additional information about payment practices
- put payment information on their website.
Companies would face fines if they do not comply with the requirements.
Philip King, chief executive of the Institute of Credit Management, said:
“Small businesses need to make better informed decisions before entering into commercial relationships and this measure will be invaluable in helping them enter into such relationships with their eyes wide open.”
A separate survey by the Federation of Small Businesses (FSB) found that 17% of FSB members have suffered from poor payment practices over the last 2 years.
The most disliked payment practices according to the FSB survey were:
- ‘pay to stay’ fees where businesses have to pay to remain on supplier lists
- long payment terms
- late payments
- prompt payment discounts
- retrospective discounting where change terms after a contract has been signed.
John Allan, national chairman of the FSB, said:
“…small businesses are fast approaching the breaking point. They are no longer prepared to put up with these sharp practices. Brands that think they can continue to squeeze their suppliers with impunity may get a nasty shock when what they are doing comes to the attention of their consumers.”
Are late payments causing you cashflow problems? Feel free to contact us for advice on how to improve your cashflow.
- Financial Support for Businesses during Coronavirus (COVID-19) - 21 April 2020
- Coronavirus Update – 2 April 2020 - 2 April 2020
- Entrepreneurs’ relief lifetime limit slashed from £10m to £1m - 2 April 2020
- Chancellor ups annual pension allowance thresholds by £90,000 - 2 April 2020
- Coronavirus pandemic prompts one-year business rates holiday - 2 April 2020