FSB finds late pay problems persist

As a result, the FSB has called on Government to strengthen the Prompt Payment Code (PPC) to make it easier for firms to complain about payment terms. It also demanded a culture change among large companies who repeatedly pay late and who have been extending their payment terms, sometimes to an unacceptable 120 days. Using data from its member survey of more than 8,000 of its members, the FSB has told the Department of Business (BIS) that more than half (51%) of its members providing goods or services to larger private sector businesses were paid late in the last 12 months. For those firms affected, being paid late or on extended terms hits them hard. It means reduced profitability (34%), paying their suppliers late (32%) and restricting their business growth (29%). The FSB has urged the Government to consider re-launching the PPC website and to promote more widely the existing 'challenge' function – where small firms can complain about a firm signed up to the code it feels isn't a prompt payer. The FSB also wants to see all signatories state what their maximum and average payment terms are as well as a named contact for small businesses who face difficulties. FSB national chairman John Allan said: "Small businesses simply can't be expected to lend interest free to their large customers, which is in effect what extended payment terms and late payments results in. This is as much a policy issue as it is a cultural problem within UK business. Government needs to get its policy on this right but as the biggest buyer in the UK, it should also exemplify best practice in paying its suppliers in a timely manner."