The UK Government has just announced it has warned 10,000 businesses, including all of its strategic suppliers, that they must pay their suppliers on time or else they face being prevented from winning further government contracts, but private firms are doing it too.
Holland & Barrett
Pauk Upal, who has been small business commissioner since December 2017, said according to the Financial Times in his first naming and shaming of a big company over a major complaint of smaller businesses that, “The retailer doesn’t care about its suppliers or take prompt payment seriously.”
Apparently, Holland & Barrett’s standard payment terms are 90 days, although shorter for some small suppliers.
Removing any payment delay
Previse's, the fintech which is working with a number of government departments to get suppliers paid instantly, CEO and founder Paul Christensen commented:
- “Pressing more than 10,000 businesses to pay their suppliers faster is a welcome move which can potentially help improve the fortunes and cash flow of thousands of suppliers in the UK.
- “Government procurement is worth £223 billion a year. Ending slow payments would be transformative for hundreds of thousands of suppliers. It will also stand as a powerful example to business and pressure large buyers to improve their own standards.
- “Slow supplier payments can destroy SMEs and leave them without the cash they need to invest and grow their business. If the Government can deliver on this promise, it will be a big shot in the arm for British productivity and the economy.
But making a commitment to pay faster is one thing, delivery is another. Christensen commented, “Payment processes involve a lot of administration. Invoices have to be checked and cross-checked for errors or duplications, then inputted into various systems and passed between job functions to actually get paid. That can’t simply be sped up at the stroke of a ministerial pen.”
Previse have a solution that can make this happen, so SMEs can be paid instantly, see.
CTMfile take: As CTMfile has written many times before: late payment is a cancer to business and society. The impact continues. UK companies need to be aware they will be “named and shamed”.
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