To say there’s a late payment “culture” in the UK is something of a misnomer, because the implication is that paying late is both intentional and endemic. And the reality is a little more complex, as I found out last week during a conversation with Philip King, Co-Chair of the Prompt Payment Code Advisory Board, and CEO of CICM.

For the last year or so, Ariba’s been talking about the new payment addition to their suite of solutions – AribaPay. It's been an important move for the company in their quest to capture the whole end to end of business transactions, and one which Senior Director Solutions Marketing, Drew Hofler talked to APN about at their AribaLIVE event last week. While it’s currently only available in the US, the development team are looking towards creating a UK version, possibly as soon as this year. To deliver the solution in the US, Ariba partners with Discover – a direct banking and payments services company, the question of when Ariba launches in the UK and/or globally, is likely to sit around finding a comparable partner to work with.

Despite various initiatives, not least talk of a tougher enforcement of the Prompt Payment Code, banks are still reluctant to lend to SME businesses. The figures, for them, simply do not stack up. So, with suppliers being squeezed by extended payment terms, and banks giving them the “waiter’s eye” – many businesses are faced with an increasingly difficult working capital crunch. In the past they would have been limited to traditional supply chain financing arrangements such as factoring to take the pressure off and the wolves away. That is, if the banks involved were sure of a lucrative enough incentive for them in the deal, and if the business qualified in the first place...

There’s a school of thought that runs along the lines of – when the economy picks up, some of the alternative funding methods that have flowered in the wake of the recession, will cease to be the flavour of the month. The theory being that if interest rates increase, the benefits to be gained from greasing the wheel of the supply chain by paying early at a discount, will be outweighed by the benefits of keeping the money in the bank. Undoubtedly that will be the case for some organisations, just as now there are many who are yet to be convinced by the merits of being able to use supply chain finance or dynamic discounting even in today’s market. Sometimes in business old habits die hard.