Small Business Minister: "Carillion Must Be Catalyst For Change" - CPA

Small Business Minister: “Carillion Must Be Catalyst For Change”

6th April 2018.

The minister for Small Business says the collapse of Carillion must act as a catalyst to supporting small businesses and prompt payment is a central part of the solution.

In a recent interview with ‘Credit Champions’, a news and current affairs programme created by The Chartered Institute of Credit Management (CICM), Small Business Minister, Andrew Griffiths championed the controversial Prompt Payment Code. The code was formed to encourage suppliers to pay on time but since one of its signatories, Carillion became an infamous late-payer and collapsed itself earlier this year, trust in the code diminished. Mr Griffths insists the code is “going well” however, and believes it sets the standard to which companies must adhere.

The code’s existence is enough to show the shifting of priorities within the Government, with late payment finally taking centre stage. There is still a far way to go, but shining a light on what constitutes good and bad payment practice is certainly a good place to start. Business owners should ultimately take control of their own finances. This can be achieved by setting in place an efficient credit control procedure, as well as approaching credit management professionals like the team at the Credit Protection Association.

CICM Chief Executive, Philip King insists late payment legislation like the Prompt Payment Code has played an important part in beginning to change attitudes towards late payment. Mr King urges that more be done to promote the code amongst businesses.

“What we need is for the Code to be more widely promoted and supported, and for business organisations to get behind it, and actively encourage their members to raise challenges where appropriate”.

Late payment is an issue that has tormented UK businesses for years, and asking nicely simply isn’t proving effective. A tougher and more legal approach is needed, whether that’s the Prompt Payment Code or something else. The irony is that the Late Payment Compensation of Debts (Interests) Act already forces companies to pay within a 30 day period, but few businesses take advantage or even have knowledge of the legislation.

As Philip King suggested, businesses should be encouraged to challenge the invoice if appropriate, but too many are intimidated or too financially vulnerable to make a claim. Here at the Credit Protection Association, we do all the work for you. This means we chase late payers, credit check your customers and even utilise that little-known legislation to get you a little extra cash to help your business.