Business banking - FSB online tables highlight late payment worries

Category: Business
Date: 6/28/2006 9:07:05 AM

The Federation of Small Business, in association with The Credit Management Research Centre at Leeds University's Business School and The Better Payment Practice Group, has announced that it has launched the 2006 Private Sector Payment Performance League Tables as an online database. The online tables, showing how the UK's publicly quoted companies perform when it comes to paying invoices on time, will be updated on a daily basis. Despite encompassing over 5,000 companies, there were still 2,200 companies, including some of the UK's largest names which failed to report the number of days they take to pay, in direct contravention or regulations.

Since 1997, when late payment legislation was introduced, the tables have proved a valuable addition in the assesment of the affects of late payment upon small businesses. According to John Walker, FSB National Policy Chairman: "Late payment of invoices is a complex issue but in simple terms an invoice that is not paid on time can spell the end for a small business." Despite legislation, small businesses are reluctant to take larger firms who do not pay to court, for obvious reasons. As many small businesses rely on one large contract for its future, the late payment is perceived to be less of a threat than the contract failing to be renewed.

It is hoped that small businesses themselves will utilise the site more fully, as John Walker states:
"Small firms will be interested in using these tables before entering into contracts to supply large firms with goods and services. They are an excellent source of information." At the same time, John hopes the tables may encourage the worst performers: "I hope that the large firms which have been identified as poor payers will raise their game to a much higher level, whilst I also congratulate those identified as good payers."

Perhaps next year some of the poor payers may find themselves with unwanted awards. Ashley Commercial Finance has recently announced their BAFTA s (Business Accounts in the Future To Avoid). Two of the more relevant 'can't pay/ won't pay' reasons are, "I haven't got a pen" and the more realistic, "I refuse to pay because I heard a laugh when I answered the phone."