BUPA named and shamed for poor payment practices.

22/8/2019.

Paul Uppal, the government’s small business commissioner has named and shamed BUPA  for failing to pay adequate compensation to a small business in a case of late payment of invoices, following an investigation into a complaint.

Action is needed on late payments!

The scourge of late payment, the late payment culture is still endemic in British business. It is still in the DNA of every finance director to pay bills as late as possible.

But it comes at a cost as  late payments pushes tens of thousands of the UK’s small businesses into insolvency each year and distracts millions in the needless, time consuming, un-productive business of chasing outstanding payments.

If everyone just paid on time, productivity could sky rocket as the nations business owners were enabled to re-direct time and resources into productive endeavors and concerntrate on growing their businesses and providing excellent goods and services to the market.

The Small Business Commissioner realises this and needs to  continue to use his office to name and shame culprits.

The tolerance for the invoice-dodging, excuse-spouting financial directors needs to come to an end.

The Small Business Commissioner, Paul Uppal is in the news as he has ordered BUPA to stop “manipulating” small businesses after an investigation found that the healthcare group settled a supplier’s invoice 75 days late.

The small business commissioner found that after a supplier’s invoice was settled 75 days late by the healthcare group, it failed to provide statutory late payment interest to the company.

Suppliers are legally entitled to charge 8 per cent over the Bank of England base rate when commercial customers do not pay their bills on time, but Bupa attempted to sidestepped this via a clause in their contract.

The complaint was brought to the Small Business Commissioner by Blacklight Advisory Services Ltd regarding the late payment of consultancy fees owed by Bupa Insurance Services Ltd.

Andy Lyon, a partner in Blacklight Advisory, a small consulting business, got so fed up with Bupa’s speed at paying his invoices that he complained to the newly created Small Business Commissioner.

The SME submitted an invoice for £29,403.76 on 2 November 2018 based on 45-day end of month payment terms, but was not paid on the due date of 15 January 2019 despite chasing on numerous occasions.

A report on the case said Bupa Insurance Services Ltd responded positively to the commissioner’s investigation, immediately approving and releasing the overdue payment which was made 15 days outside of the contracted terms. However, the payment was made after 75 days of receipt of invoice.

Bupa claimed the late payment took place “due to staffing inefficiencies” but this was never  relayed to Blacklight, according to the report.

The commissioner’s investigation found that Blacklight was “continually misled and reassured” by Bupa’s finance director and revealed that pay delays were “commonplace” at the company.

BUPA even had the cheek to blame Blacklight for not following their recommended invoice submission process.

However, the report noted that Blacklight had submitted its invoice based on procedural instructions provided by the relevant directorate whilst being reassured on several occasions that the invoice had been received and authorised.

Bupa Insurance Services recognised that it did not meet the agreed contractual payment terms, and acknowledged the late payment by offering a claim for late payment interest at 2% above the Bank of England base rate for the value of the invoice.

The small business commissioner took issue with this decision, saying the compensation in such cases should be ‘substantial’.

The report pointed out that the Late Payment of Commercial Debts (Interest) Act 1998 sets a statutory value of 8% above the Bank of England Base Rate for interest that is chargeable on late paid debts. The Act also sets compensation to be charged at statutory defined levels dependent on the value of the debt. £40 for debts up to £1000, £70 for debts between £1000 and £10,000 and £100 for debts over £10,000.  With each invoice being deemed to be a separate debt. In this case the statutory compensation would have been £100.

Parties can agree to alternative terms contractually, but there must be a “substantial remedy” for late payment and therefore big businesses cannot impose derisory terms largely below those set in statute. The contractual terms would have to be substantial.

The commissioner did not consider the variation to 6% below the value defined in the legislation a considerable remedy or deterrent for late payment.

Bupa Insurance Services stated that it offers preferential 30-day payment terms to small businesses, but the investigation found this policy was implemented after commencement of the complainant’s contract. Blacklight requested a variation in payment terms to 30 days, but this was rejected and it was held to the original agreement.

Paul Uppal, small business commissioner, said: ‘I am witnessing variations from the statutory defined value of late payment more frequently in contractual agreements.

‘It seems that small businesses are being pressured into accepting these terms if they wish to supply large businesses as part of standard framework agreements.

‘A substantial remedy for late payment should be substantial. It should adequately compensate the small business for impacted cash flow, and any additional resources required to chase outstanding invoices.

‘The remedy should also act as an incentive to ensure payment is made on time. I do not consider a contractually agreed variation of late payment charges at 2% above the Bank of England Base rate from a global company sufficient.’

He called on Bupa to improve transparency over its payment terms to prevent anxiety and cash flow issues for small suppliers.

The report made specific recommendations for BUPA, which include setting out the agreed remedy in standard framework contracts; agreeing the value of the remedy after considering the bargaining position of the small business, effect of late payment on the small business, commercial certainty and benefits of being a supplier; increasing transparency by promoting its preferential payment terms to its small business supply chain; and offering small businesses 30-day payment terms as standard.

A Bupa spokesman said: ‘We take our commitment to prompt payment very seriously. Unfortunately, in this instance, an invoice error led to delays in processing the invoice and as a result the payment was late. Since this happened, we have introduced a flexible payment policy that now allows us to offer shorter payment terms of 30 days to small suppliers on request.’

Peter Lock, procurement director at Bupa Insurance Services, said: “On this occasion, due to a number of issues, including that unfortunately Blacklight did not follow the recommended process and submitted their invoice incorrectly, we have not met our contracted payment terms and would therefore be liable to pay late payment interest in line with our contract with Blacklight. We have already communicated this to Blacklight directly.”

Mr Uppal said: “Bupa Insurance Services claim to be a leading international healthcare group who are committed to make quality healthcare a priority. I would like to see the same level of commitment demonstrated when it comes to protecting the health of their supply chain by offering 30-day payment terms as standard.”

Andy Lyon, partner at Blacklight Advisory, said: “Throughout the life of the contract we endured issues with payments which greatly disrupted our advisory business. Bupa failed to provide us with any recommended processes to follow and the lack of accountability for the mistakes they have made shows little regard or empathy for small businesses.”

Do you sell on credit?

With pressures on the cash flow it is essential that you stay on top of the credit limits you grant customers and watch carefully for any late payments.

Those customers will look for the easiest option  to boost their cash-flow. Don’t let it be you.

You can’t just assume your customers can and will pay you eventually, no matter how big their name is.

It is essential to have credit management systems in place to monitor and check your customers credit worthiness.

It is also best practice to use a trusted third party like CPA to make sure you are paid on time by customers, no matter how good a name they have.

About CPA

The Credit Protection Association can help!

Formed in 1914, CPA has been providing credit management services to SMEs for over 100 years.

At the Credit Protection Association, we provide first class credit information that can help you avoid being over extended to customers who are at risk. Our monitoring service can flag up warning signs long before the end, giving you the chance to adjust and reduce your exposure. We provide recommended credit limits and credit scores on a traffic light system and can help you set appropriate credit policies for your customers.

We regularly publish lists of the latest insolvencies but by then it is too late. Our credit reports however predict approximately 96% of company insolvencies long before they arrive.

Companies in trouble usually have very bad cash flow and they try to deal with it by delaying payment to their suppliers, increasing your exposure to them.

If you supply on credit, help us help you identify the risks.

Why use a third party collector?

As a third party collector, we can also get your payments prioritised over those who are not as hot on collections. When you customer receives a letter from the Credit Protection Association regarding their outstanding account, they are going to want to get that resolved as a priority. Our overdue account recovery service can get your unpaid invoices to the top of their “to do” list and get your invoice paid.

Over the years we have collected billions in overdue invoices for our customers.

Our debt recovery and credit management services give our members the financial freedom needed to grow and prosper, while our new Late Payment Compensation department could unlock hidden potential and offer the compensation needed to springboard your business to success.

The Credit Protection Association – Prompting Punctual Payments – Ethical, Effective, Efficient, Economical collections

Ready to speak to an advisor?

For help or advice on credit management, entirely without obligation.

Call us today

0330 053 9263

CPA is passionate about late payment

The Credit Protection Association has been protecting smaller firms against poor payment practices for over 100 years.

We are extremely passionate about breaking the late payment culture that holds back the UK economy and threatens many SMEs with cash flow difficulties being the single biggest killer of Britain’s small businesses.

If you were regularly paid late we can help. Those former customers used you to boost their own cashflow, regularly paying you late.

As a result you had extra costs, you had the distraction of having to chase payment, you had opportunity costs because your capital was tied up in their late invoices.

Under little used legislation, you are entitled to compensation for those late payments.

Now you can boost your own cash-flow.

CPA can help unearth the those hidden treasures.

We have the technology to reveal the compensation you are due and we have the extensive experience and expertise to then turn those claims into cash.

Yes, CPA can help you boost your business cash-flow.

Don’t let your bankers control you, contact CPA today.

The Credit Protection Association – Prompting Punctual Payments – Ethical, Effective, Efficient, Economical collections

Read our blog here on how to crack down on the late payment culture.

Read our blog here on how to give late payers the slap they need.

The “Why” of the late payment culture.

New PM should walk the walk and back small firms over late payments

Paying late is “crack cocaine” to big business.

Late payment culture risks “spiraling out of control”

visit our late payment compensation page

See our full blog and FAQ on late payment compensation

Do you realise you could be sitting on a fortune?

Late payments often result in a cash flow crunch and leave SMEs in need of a cash injection.

If you sold B2B on credit then there may be a hidden source of capital you can call on.

If you fancy an bit of extra cash in your business, rather than jumping through hoops with your bank, you could look to uncover the resources from an unexpected source within your own business.

Not many are aware but there could be a hidden fortune within your business, sitting there, just waiting to be uncovered and released.

We can help you uncover the pile of gold, you didn’t even know you were sitting on.

If you trade with other businesses and were often paid late then you could be entitled to significant compensation.

Under little known and under-utilised legislation your business could be due huge amounts in compensation that you didn’t even know about.

Let’s be clear – this is not a way to weaken any customer relationships you value. It is one that identifies who’s been paying late and then recover the potentially significant sums in compensation using Late Payment Legislation from businesses where the relationship has already ended.

You can pick and choose who you want us to follow up – but once we’ve agreed which companies you’d like to pursue compensation from it’s a fast process and there’s no financial outlay to you whatsoever. My team at CPA put its expertise to work to recover the compensation due and fight late payment culture.

That compensation could provide the cash boost your business needed.

But don’t delay, that compensation evaporates if not claimed within six years of the late payment.

How can CPA help?

CPA has developed a unique technology to dig into your accounting records and discover the cash injection you are due by means of compensation. The software does all the hard work. Our software interacts over the cloud with over 300 different software packages, working directly with your accounts package, just so long as it’s stored on a computer.

We recognise that most companies do not have the resources to spend time on the identification and calculation of Late Payment Compensation. Our service can produce an Analyses within just a few days with (usually) less than 30 mins of co-operation from our clients. We work directly with over 300 accounting packages but can also work with bespoke accounts packages. Indeed, speed is essential as the oldest invoices may fall foul of the 6-year time limit.

Once the Sales Ledger Analyses is made available to clients, all that is required is that management decide which commercially sensitive ex-customers to remove from the list and return it to us.

CPA then uses its years of collection experience to explain and recover the Late Payment Compensation Claims. Clients do not handle any part of the recovery process as our team will take all communications from the companies against who the claims has been made. Often, it’s simply a case of explaining the legislation, sometimes we have to go all the way and enforce the legislation through the courts.

The result is that we are realising clients’ claims worth tens and sometimes hundreds of thousands of pounds which, of course, is pure net profit.  You may also be among the recipients of “hundreds of thousands of pounds” should you elect to take advantage of our services.

We do the work, you receive the cash.

If you have supplied goods and services to businesses on credit and were regularly paid late then you could be due significant sums in late payment compensation.

We are talking to companies and unearthing claims in the hundreds of thousands from former business customers who paid them late. Large business customers who abused their power to inflict unfair and sometimes illegal payment practices.

We are helping business owners  who are looking to boost the returns from their business before they retire. We are helping businesses who have lost major clients after years of loyal service to get properly compensated for systematic late payment. We are helping companies that were looking to close down, who looked insolvent and finding that cash injection they need to avoid insolvency.

Those former clients who regularly paid you late can finally be made to pay.

Ready to speak to an advisor?

For help or advice on credit management, entirely without obligation.

Call us today

0330 053 9263

The Credit Protection Association is a credit management company established in 1914. If you supply goods or services on credit then we can help you!

The Credit Protection Association – Prompting Punctual Payments – Ethical, Effective, Efficient, Economical collections

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