25th January, 2023
It feels crazy to even have to say this – how have we moved so far from such a basic ethic as paying our suppliers on time? And yet, Bellevue Law was one of our accredited members to speak out on the issue last year and call the big businesses to account. As founder, Florence Brocklesby, challenges: “if you want to do your bit in the cost of living crisis, pay your suppliers on time. Especially the small businesses and freelancers who are relying on your payment to pay their own suppliers and their families’ bills.
My firm’s slowest payers by a country mile are not individual clients paying from their own pockets or owner-managed businesses, but large corporations who pay our fees for advising their exiting employees on settlement agreements. We regularly wait months, and spend hours chasing, for large banks and corporations to pay a £500 bill. It’s so consistent that it is hard to believe it isn’t a deliberate strategy to benefit their own cashflow.”
This issue is so frequently overlooked in conversations about social responsibility which is why we were delighted to be involved this week in a Parliamentary reception hosted by TSB where a range of politicians and businesses gathered to discuss the ongoing issue of prompt payment.
The prompt payment code is a voluntary initiative set up by government whereby companies signed up are required to pay 95% of invoices within 30 days to their small suppliers and 95% of all invoice within 60 days. It is also our 10th component – and I can echo Florence’s sentiment above – I know of organisations hoping to achieve GBC accreditation who cannot do so yet because they haven’t got the systems in place to ensure prompt payment. How can this be the state of affairs in our technically advanced 21st century Britain?
Mark Curran Customer Banking Director from TSB started the night by sharing how they’re promoting and helping their large organisation see the benefits to prompt payment. TSB prides itself on paying SME suppliers within 7 days of invoice – and we can testify to that speed, when they pay their renewal invoice! This article sums up their challenge to bigger businesses and shares their experience of partnering with a technology platform in order to make such swift payment possible.
This is an issue political parties from all sides can agree on, and how important it is when SMEs account for 99% of the business population in the UK. The FSB estimates 50,000 small businesses go bankrupt every year due to overdue payments!
The amazing Liz Barclay, the Small Business Commissioner, has taken on this role with passion and determination to go above and beyond just prompt payment. If small businesses were paid on time, this could boost the economy by an estimated 2.5 billion annually and going even further if they were paid 2 weeks earlier this estimate could rise to 10 billion annually.
This was a fantastic, informative evening with the right people in the room to make the vision of prompt payment a reality. When it comes to the many challenges of the current time, this one surely should be one we can address swiftly and effectively? Compared to the complexities of reaching net zero, simply paying invoices on time should not be difficult. I can only conclude that what is lacking is willpower and prioritisation of the job in hand.
I hope the statistics cited at this event will be sobering enough to lead to action. 50,000 small businesses going bankrupt every year due to overdue payments. This is a practice that must be stopped and we are proud to champion prompt payment as part of our holistic approach to responsible business as whole.