Suppliers 'will avoid late payers'

24 August 2009

25 August 2009

Suppliers are expected to shun contract opportunities with well-known late payers, experts have warned.

Matt Goodman, policy representative at the Forum of Private Business (FPB), said unilateral changes to payment terms could make vendors less likely to bid for future work.

Stephen Alambritis, chief spokesman for the Federation of Small Businesses, added that with fewer suppliers competing for work, buyers face increased prices.

This follows the news that brewer Carlsberg UK is extending its supplier payment terms from 62 days to 95 days (Web news, 14 August). Carlsberg said suppliers could dispute the terms if they wish.

It is the third firm to enter the FPB's "hall of shame" in the past two months, joining construction firm Rok and IT company Northgate Information Solutions.

Late payment has become a growing issue during the downturn. Figures from the Credit Management Research Centre at Leeds University Business School show county court judgments for late payment rose from 37,017 in the second half of 2008 to 47,521 in the first half of 2009.

Meanwhile, CPOs at an SM/Office Depot roundtable last month said treating suppliers badly now could "bite you on the backside" when the upturn comes (News, 6 August).

SMaug2009

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