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Poetic thoughts on late payment

Last week’s BACs research highlighted how the ongoing culture of late payment remains a major concern small firms up and down the UK. The debt burden shouldered by UK small businesses is now £40 billion, up a staggering 33 per cent from the same time last year. 

In a way, the BACs data comes as no surprise. In fact, they mirror the findings from our banking and finance survey earlier this year, where 23% of members reported an increase in late payment over the past year compared with just 3% who reported a decrease.

We know that small businesses are a key part of the economy and their growth in particular is vital to ensuring the sustainable recovery in the UK. But, how can small firms look to concentrate capitalising on the growth opportunities available when they spend on 130 hours a year chasing late payment and effectively a third continue to have no option but to seek external finance to cover the gaps in cash flow?

The Forum of Private Business has continued to provide our members with practical advice in lessening the burden of late payment. Further advice can be found here

However, it is all too apparent that small businesses continue to shoulder the lion’s share of late payment burden and are still keen to see additional measures to tackle the issue.

Government has acknowledged this continuing headache for the small business community, with the Prime Minister acknowledging as much. We will see the introduction of measures to tackle late payment as part of the Small Business, Enterprise and Employment Bill, however the devil will be in the detail. The Forum has lobbied hard on this issue and continued to stress the need for decisive action in order to tackle the issue head on in our response to the Government’s consultation on late payment.

What we do know is that the Bill will introduce a new reporting requirement on large companies and LLPs to report on their payment practices and policies. However we have still to hear as to the additional measures that will be included in the Governments attempt to break late payment culture. Effective action is needed and government must accept that accepts that not only has a responsibility to play in this area but also that its increased action can also act as an important catalyst for better payment practices.

If you would like to know more about our activity in this area, please click here

And on that subject, let’s finish with the following little ditty.

 

Bullying suppliers is part of their game

Agreements ignored, no allegiance on display

March them into the Hall of Shame

 

Mandatory extra discount they will claim

Take an invoice haircut you’ll hear them say

Bullying suppliers is part of their game

 

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