Big businesses urged to sign up to payment code
Business minister Shriti Vadera has urged big business to sign up to the government’s Prompt Payment Code, an initiative which urges large companies to pay suppliers promptly.
Vadera also revealed that 11 new FTSE 100 companies, including Barclays, Sony UK and B&Q, have committed to sign-up to the code of practice.
A further nine, including Alliance Boots, have committed in principle to adhering to it. The retail chain has been criticised for last year’s increase of its payment terms from 30 to 75 days.
“Late payment can be the final straw for small business in the current climate. So the commitment by major companies heading up supply chains to pay on time is a win for all businesses,” Vadera said.
She added that she will “continue to press” the remaining FTSE companies yet to commit to paying suppliers on time to sign the agreement.
The average delay in companies paying bills has increased from 20 days a year ago to 23 days, putting increasing pressure on cashflow for small firms.
In October, Gordon Brown announced a commitment to pay all central government suppliers within ten days.
Business secretary Lord Mandelson said: “Government has taken the lead with nine out of 10 central Government invoices now being paid within 10 days – the challenge is now for business to step up and play fair.
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“The promise by FTSE companies to pay on time is very welcome and will hopefully bring an end to the devastating impact which late payments can have on small business.”
The Tories had previously labelled the initiative a “damp squib,” after it emerged that only a handful FTSE 100 companies had signed up to the government-backed code.
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