A campaign inviting the 75 top 100 FTSE companies who weren't
already signed up to the Prompt Payment Code (PPC) resulted in only
ten doing so. The code encourages private and public sector
organisations to pay on time.
The Be Fair- Pay on Time campaign is fronted and co-signed by
Debbie Abrahams, MP for Oldham East and Saddleworth; the Institute
of Credit Management (ICM); the Federation of Small Businesses
(FSB) and the Forum of Private Business (FPB).
Letters were sent out to invite the 75 FTSE companies on the
6th July with a 31st August deadline for
response. Out of the companies to receive a letter four said they
would not sign the code, sixty did not respond and one sent a
holding letter that was never followed up.
National Chairman of the FSB, John Walker, said: "It is good
news that ten of the biggest companies in the UK have signed up to
the campaign. We now need to see more following their
He continued: "Too many businesses struggle with their
cash-flow because of late payments and it's time to stop this. It
just isn't fair that small firms struggle because bigger businesses
take too long to pay."
Those that did sign up were BG, BHP, Reckitt Benckiser, Royal
Dutch Shell, Serco, Standard Life, Vodafone, Land Securities,
Severn Trent and Tullow.
Companies signing up to the code commit to: paying suppliers
within agreed terms, ensuring their suppliers know to invoice them
and to encourage good practice.
A survey conducted by Graydon earlier this year found that late
payment is a major problem for around 266,000 businesses. A further
328,000 indicated that it was a minor problem. Over half (59 per
cent) had to in turn pay their suppliers late due to lack of
reserves within the business and being paid late themselves.
Of those surveyed 75 per cent believed the benefits of prompt
payment outweighed those of late payment. The most popular reasons
were that it created long lasting relations ships and it was how
they expected to be treated.
Effective ways to minimise late payments, top survey
- Regular/continuous calling
- Put clients on stop/withhold future services and supplies
- Relationship building
- Good credit control team/process
- Clear terms and conditions/create schedule for payment
To read the full survey results click here.