Late payment problems continue to worsen


Late payment problems continue to worsen

Simon Quicke

The issue of late payments has been ongoing this year, made more acute by the pressure of the credit crunch, and shows no signs of improving.

According to the Forum of Private Business (FPB) it seems to be almost endemic that SMEs will have to wait for larger customers to pay them.

The business lobby group found that 86% of those its surveyed said large customers were not paying in contractually agreed periods and as a result 72% said it was having a serious impact on their business.

Almost a third of those quizzed by the FPB revealed they were owed between £1,000 to £5,000.

"Late payment is on the rise, according to our research, with more than half of respondents saying it has become more of a problem over the last 12 months," said the FPB's finance and administration director, Nick Palin.

"The Government should be doing more, both by paying on time itself and by implementing measures to tackle the problem without increasing the burden of legislation faced by small firms."

"Supplier abuse appears to be widespread, and many smaller firms are in a catch-22 situation, fearing that, if they take action and use the legislation to charge interest, these larger companies will simply refuse to deal with them again," he added.

Resellers have already been warned on numerous occasions in credit crunch coverage by MicroScope that they need to keep a firm eye on cash flow and avoid where possible exposure to bad debts.

The FPB has started a name and shame list of suppliers that have failed to pay SMEs on time.

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