The Forum of Private Business has thrown its weight behind a new campaign which is calling for all of the UK's top 100 FTSE companies to sign the Prompt Payment Code.
The scheme is part of the wider 'Be Fair – Pay on Time' campaign conceived by Oldham and Saddleworth MP, Debbie Abrahams, which asks all firms to pay their suppliers as quickly as possible under the agreed terms and conditions set out at the start of the contract, and without retrospectively changing payment times.
The challenge to the world of big business was launched last night (5 July) at an event in Oldham attended by Shadow Business Secretary Chuka Umunna in a bid to highlight the crippling effect late payment of invoices is having on SMEs across the country.
A letter countersigned by a number of leading business organisations, including the Institute of Credit Management (ICM) and the Forum, has been sent to the UK's top 100 FTSE companies not already signed up to the PPC, inviting them to show their commitment to pay their accounts on time and help SMEs stay afloat as the country recovers from the recession.
Currently, just a quarter of the FTSE 100 companies have signed up to the voluntary payment code.
Phil Orford, the Forum's CEO, said: "The Prompt Payment Code is something all large firms could and should subscribe to. It asks nothing more from responsible businesses than to pay suppliers as and when agreed, without changing terms and conditions retrospectively.
"FTSE 100 businesses are the true bastions of the UK's private sector and, by subscribing to the Code, they will be leading the way as they rightly should for others to follow. This is their chance to lead by example on what's an extremely important issue for small businesses."
Chuka Umunna added: "In the current economic climate, it is particularly crucial that our small and medium-sized businesses receive payments promptly.
"Too many small companies are waiting too long for payments, and many successful firms are being put at risk of going under because they are not being paid on time by large companies, organisations and the public sector. Collectively, SMEs are owed billions of pounds in late payments.
"It is crucial that we tackle this problem to prevent more small firms, which are the backbone of our economy, going under. That's why I am delighted to support Debbie's campaign."
The Forum has been lobbying hard for its members on the issue of late payment. Alongside a number of initiatives, including a House of Commons summit at which the findings of research into cash flow management carried out with Graydon UK were revealed, it has this year urged the Government to use the public sector procurement process to encourage better payment practices from larger firms, using the tender process as a lever.
The Forum also has its own 'Hall of Shame', where large firms that are proven to have changed their payment terms and conditions retrospectively are identified in a rogues' gallery and publicly 'named and shamed'.
One part of the Be Fair – Pay on Time campaign is to encourage supporters to join in themselves by tweeting the top 100 companies directly asking them to sign up to the PPC and using the hash tag #payontime.