Government proposals to tackle late payment

Wednesday, January 21, 2015

Large companies could be forced to publish information about their payment practices, under government proposals designed to combat late payment.


The measures would oblige large businesses and companies listed on stock markets to:
  • ŸŸissue quarterly reports on payment performance
  • ŸŸmake additional information about payment practices public
  • ŸŸput payment information on their website.
Companies would face fines if they do not comply with the requirements.

Philip King, chief executive of the Institute of Credit Management, said:

“Small businesses need to make better informed decisions before entering into commercial relationships and this measure will be invaluable in helping them enter into such relationships with
their eyes wide open.”


A separate survey by the Federation of Small Businesses (FSB) found that 17% of FSB members have suffered from poor payment practices over the last 2 years.

The most disliked payment practices according to the FSB survey were:
  • ŸŸ‘pay to stay’ fees where businesses have to pay to remain on supplier lists ŸŸ
  • long payment terms
  • ŸŸlate payments
  • ŸŸprompt payment discounts
  • ŸŸretrospective discounting where businesses change terms
  • after a contract has been signed.
John Allan, national chairman of the FSB, said:

“…small businesses are fast approaching the breaking point. They are no longer prepared to put up with these sharp practices. Brands that think they can continue to squeeze their suppliers
with impunity may get a nasty shock when what they are doing comes to the attention of their consumers.”