Suppliers Hit Back at Carillion

12th February 2018.

Small businesses have come forward to accuse liquidated construction group, Carillion, of having used “delay tactics” to avoid paying their suppliers.

In the wake of Carillion’s demise, there has been much debate over how suppliers are treated by big companies, particularly in regards to late payment. Small businesses have claimed to have waited up to 120 days for payment, with the outsourcing firm offering a catalogue of excuses for the delay.

Here at the Credit Protection Association, many of our members have fallen victim to late payment, some have even suffered by Carillion’s hand. We offer our members various credit management products to evade late payment, and debt recovery services, to help you recover. Despite Government’s best intentions, no late payment legislation has been passed. Nevertheless, there are precautions that businesses can utilise, to keep late payers at bay.

Emma Mercer, Carillion’s most recent finance director defended the company’s actions, claiming that the average payment time for suppliers was 43 days last year, and said that those who were waiting as long as 120 were “outliers”, accounting for less than 5 percent of contracts. Less than 10 percent were waiting more than 60 days, she said.

Carillion was a signatory to the Government’s Prompt Payment Code, which proved ineffectual as companies continued to force their suppliers to extend payment terms.

In spite of this, subcontractors have said that Carillion found excuses not to pay. Some ridiculous, some not so ridiculous.

Chris Perry, a director of facilities management firm Perrymac, said he was often left waiting up to 120 days for payment as Carillion used “delaying tactics” such as finding fault with invoices and “minor discrepancies” with the work.

“Our original terms were 60 days, but [Carillion] put us on 120 days,” Mr Perry said.

Mr Perry eventually forced Carillion to sign a purchasing order, a document that listed a detailed breakdown of services. Perrymac refused to operate without one, knowing that this would ensure they would get paid.

Carillion has once again opened up the late payment debate. It’s a simple debate, as it should be common sense that you should be paid for goods and services you supply. Whether you’re big, small, or somewhere in the middle, it shouldn’t matter.

Nonetheless, big companies like Carillion have been accused of commercial bullying. Many small businesses are too intimidated to take big companies to court and have despaired over their unpaid invoices in silence. Carillion’s collapse swept across the supply chain and has made late payment an issue for everyone. A small business commissioner has been appointed, and the Prompt Payment Code is looking towards reform.

While the Government concentrates on bringing late payers to court, the Credit Protection Association will concentrate on getting YOU paid. We offer debt recovery services to chase down those late payers and revive your cash flow. We also offer various credit management products such as credit reports and monitoring software so you can ensure you haven’t hired the next Carillion. Our company directory will also let you know about your customers’ directors and their financial standing, so you can catch any abnormalities early before they affect your business.