Tuesday 13th August, 2013

The Government has released a set of recommendations in response to the news that a staggering £36bn was owed to SMEs in late payments last year. Politicians are now trying to force large corporations to publish how long they take to pay these organisations in an effort to force companies to own up and and pay up.

Chair of the inquiry into the situation, Debbie Abrahams said; "Until top CEOs, and their executive board members, make a decision to act ethically in business, and treat our small and medium sized business fairly, this problem will persist,"

"The public has grown tired of hearing about huge, greed driven, pay packets, pay-offs for failure and tax evasion; but allowing a culture of late payment to persist unchallenged is another board-level decision that directly effects ordinary, hardworking, people across the country."

The Federation of Small Businesses, revealed that more than half of the SMEs it represents were paid late by large companies. In 2012 more than 124,000 small and micro businesses said they were almost put out of business by late payments. It added that with an average wait of 58 days, between completion and payment for services, many SMEs struggle to stay afloat - with some having no option but to sever ties with persistently late paying suppliers.

Among main recommendations from the report, the inquiry said the government should promote the adoption of 'good practice' guidance for large companies in managing supply chains, including publishing performance data relating to payment-on-time to suppliers in audited annual accounts. It also said added the Whitehall should make sure that it supports intermediary agencies, which act on behalf of suppliers in seeking recompense through the EU Late Payments Directive.