Trade body calls for end to supplier squeeze as late payment takes toll

18th May 2009 | payment | The Forum for Private Business is to step up its campaign to name and shame late payers as its latest survey reveals more small businesses are suffering cash flow problems.

The trade body, which represents small and medium sized UK businesses, hopes its efforts to get large FTSE 100 listed companies to sign up to the Government’s Prompt Payment Code will encourage more firms, large and small, to pay their suppliers within agreed contractual terms.

More than half of members surveyed said late payment had worsened since the last time the FPB carried out its Economic Downturn poll, despite 26% of companies reported an upturn in market conditions, the best result since November of last year.

The FPB recently added Argos to its Late Payment Hall of Shame, after it said the retailer had doubled the amount of time it takes to pay suppliers to 60 days, as well as deducting a 4% settlement fee for paying on time.

Late payment is shaping strategic decisions for many companies in the furniture industry. One bed manufacturer told the Furnishing Report it had refused to supply one major retailer, known for lengthy payment terms, and was instead targeting independents that pay within 14 days of being invoiced.