FPB reiterates call for prompt payment
Mon, 06 Jul 2009
The Forum of Private Business (FPB) has drawn further attention to the problems caused to small businesses by late payments.
It has reported how a FTSE-listed construction company that claims one of its 'core values' is to make its suppliers more profitable is now doubling the time in which it pays them.
Rok plc has become the latest inductee to the FPB Hall of Shame after extending its standard payment terms from 30 to 60 days for new contracts with sub-contractors and consultants.
The FPB says it has now written to the firm inviting it to sign up to the government's new Prompt Payment Code, where companies pledge to "pay suppliers on time without changing practice on length of payment for smaller companies on unreasonable grounds".
Nick Palin, the FPB's director of finance and administration, said small businesses are "bearing the brunt" of the slump in the construction sector.
"It is not reasonable for big businesses to pass on costs incurred via changes to payment terms and conditions further down the supply chain," he added.
Mr Palin continued: "In the current economic climate, this behaviour can force small firms to cease trading altogether. The FPB is campaigning to change the culture of poor payment in the UK and is urging to Rok plc to sign up to the Prompt Payment Code."
Earlier research on payment, carried out by the FPB at the end of 2008, indicated that almost one in three small businesses are owed between £1,001 and £5,000 at any one time.
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