Small businesses are calling on the Government to immediately publish the Call for Evidence into poor payment practices announced in this year’s Spring Statement six months ago.
The call comes after the release of the latest Duty to Report data highlights that just over half (52%) of invoices were paid within 30 days. The data also shows that around a third (32%) of invoices were paid within 60 days while 14 per cent were paid later than 60 days. 31 per cent of invoices were not paid within the agreed terms.
To date, only 5,848 companies out of an estimated 15,000 have met the requirement to report their payment practices. All these businesses are expected to have reported this data by November 2018.
Responding to the latest data, FSB National Chairman, Mike Cherry, lambasted the poor figures and criticised the Government’s delay in launching a Call for Evidence. Cherry said“These figures show that despite the Government’s best efforts to curb poor payment practices, they have not been enough to shift the widespread ‘pay it late’ culture in the UK. We are now in a worrying place where late payments are being accepted as just another cost of doing business. This has to change or we will continue to see small firms taking drastic steps like turning to personal credit cards and overdrafts, just to survive the wait for a payment. Sadly, some don’t survive this wait.”
“Six months on, we are still waiting for the Business Department, under Greg Clark, to launch the Call for Evidence into how the late payments scourge can be eliminated announced in March’s Spring Statement. Action must be taken now or we risk losing vital momentum in the fight against poor payments practices. Warm words are not enough. Small businesses need reassurance that the Government is taking seriously the need to push the culture change required to stamp out poor payment practices. Strong action is needed to ratchet up pressure on those big businesses that are using their dominant positions to bully and squeeze small firms.”
“The Chancellor’s November Budget is a defining moment to achieve this. We are calling on the Chancellor to introduce a requirement for big businesses to appoint a non-executive director on boards with a specific responsibility for good supply chain practice including improving payment practices.”
In May 2018, FSB sent letters to all FTSE 100 company CEOs and Chairman asking for them to share the payment practices of their business and agreeing to lead the way in stamping out poor payments for good. To date, FSB has received only 31 responses.