Next government ‘must do more to tackle late payment’

Nick Elvin

The next government should take action to protect cash flow, including backing fines for late payers, if the economy is to maintain growth.

That’s according to Beatrice Bartlay, MD and founder of recruitment firm 2B Interface, who believes measures to tackle late payments, such as the Prompt Payment Code (PPC), do not go far enough to help small businesses – including many recruitment agencies – who rely on being paid on time for their survival.

Bartlay said that while the PPC has value in encouraging and promoting best payment practices between small businesses and suppliers, a recent report by the Federation of Small Businesses (FSB) found that 79% of its members are not confident about the code’s capability of addressing problems with the UK’s payment culture. Nearly half of respondents said that they have waited more than 90 days beyond the agreed payment date before receiving their money.

She added: “Although current measures and advisory guidelines mean well, if they’re broken, who is going to remember it? What we need is government-backed fiscal penalties – adding VAT would be a start – and a real demonstration that for all the talk, the government truly shows some love to the SME, the so-called ‘backbone to the economy’.

“The continually updated findings by the FSB ring loud and true to fellow small business owners that wait and wait and put the time in to follow up, before being met with another excuse why ‘I cannot do it’, such as that the invoice was lost or misplaced, which any professional will know are excuses often used to delay the process.”

Bartlay said that the lack of legislative support to ensure organisations pay on time meant smaller businesses often feel they cannot speak up to those owing them money, because they do not want to damage client relations.

“Due to reasons like this, it’s completely in the hands of the offending organisation to pay on time, which is why there needs to be more available to defend the position of SMEs,” she added. “Let’s cut the talk, and put in place hard-hitting measures.

“With greater time, effort and investment from the next government to introduce a fixed legislation that organisations must abide by when working with suppliers and other organisations, I am confident that it will provide that much-needed support to SMEs to work effectively, grow and essentially operate well.”