New ‘Duty to Report’ Data Shows Large Firms Still Paying Late

15th February 2018.

New figures have been released that stem from the recent Payment Practices Reporting Regulations that oblige large firms to publish their payment practices.

More than a quarter of all invoices are being paid late, according to new official statistics, leaving small businesses struggling for cash. Despite various Government involvement, such as the Prompt Payment Code, late payment still persists. Philip King, Chief Executive of the CICM, who published the report, noted that the issue lies not in large firms going beyond their terms, but in small firms accepting unfair terms, to begin with. Mr King stated one company had reported zero late payments, yet the average time to pay was 69 days, and only 7 percent of invoices were paid within 30 days. Small businesses are too intimidated by large firms to contest payment terms, and that is where the real problem lies.

Here at the Credit Protection Association, we deal with late payment grumbles on a daily basis. Our members either suffer from it indirectly or see their invoices neglected due to a customers’ own late payers. It’s a long chain of unhappy business owners and it is a positive step to see bad payment practices forced into the spotlight.

SMEs rely on this supply chain to keep up business, one payment to a large supplier will fuel further payments for the whole business. Philip King insists it is the certainty of payment that is the main concern for SMEs, as many hear false assurances that the payment will arrive when they expect it to.

“If more than a quarter of invoices are being paid late then the suppliers are seeing a hole in their cash flow which is worrying, at best, and can be catastrophic. For many small businesses, it’s about more than just the balance sitting in the current account”, Mr King adds.

The Payment Practices Reporting Regulations came into effect on 1 April 2017. Eventually, all of the approximately 15,000 large companies will be obliged to report on a half-yearly basis.

Paying your supplier should be common sense. They provided you with a service so they deserve to be rewarded for all their hard work. However, more and more businesses are suffering from delayed, and sometimes non-payment. The collapse of construction giant, Carillion, further stressed the issue, as thousands of businesses experienced financial losses as a result. Criticisms of commercial bullying were thrown at the construction group, and there are many cases of small firms feeling too intimidated to take action against bad payers.

Here at the Credit Protection Association, we offer all our members help in keeping late payers at bay. Our credit management products range from credit reports, which give our members a more informed picture of who they’re doing business with, and a monitoring software to allow them the assurance that this initial impression will not change. Awarding our members with a keen microscope allows them to go into business with their eyes wide open and push back against unfavourable payment terms.