FPB to give evidence on late payment at cross-party inquiry

/ Posted By - Bradleys Accountants / Categories - Advice for Small Businesses

The Forum of Private Business (FPB) is due to attend a cross-party inquiry into late payment next week, giving evidence of this blight on Britain’s small firms.

Labour MP Debbie Abrahams will chair the meeting, which will seek to look at exactly how big a problem it is for small and medium-sized enterprises (SMEs), as well as other issues surrounding payment practices in the UK.

Evidence will be provided by four panels. The FPB makes up a group of business organisations, the second features representatives from FTSE-listed companies, the third is made up of suppliers and the fourth is business and economics experts.

Parliamentarians will question each panel for 40 minutes, addressing the scale of late payment, the impact it has on SMEs and the wider economy, and the efficacy of payment systems and tools available, such as the Prompt Payment Code. Based upon this information, the MPs will ask for recommendations on how the situation can be resolved.

“Late and slow payment amounts to little more than supply chain abuse, that is big business bullying small firms to boost their own profit margins,” said Alex Jackman, the FPB’s head of policy.

"We know from recent high profile examples that the situation, far from improving, is spiralling out of control. Hopefully this investigation can shine a light on the issue and expose the real and serious problems it causes for small business."

He added that late payment can threaten the very existence of some firms.

Although late payment is undoubtedly a huge problem for SMEs, evidence suggests that the issue has been easing in recent months.

Commercial information provider Dun & Bradstreet has said that the average time it takes for companies to pay their bills has fallen by two days over the last 12 months. It stood at a peak of 17 days in 2011 and has now dropped to an average of 15 against agreed payment terms.

The positive move may have been as a result of the EU Payments Directive which makes it easier for businesses to pursue late payments, helping to protect cashflow.

Firms struggling with their cashflow or from late payment should seek financial advice for small businesses.

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