14 May 2009 | Jake Kanter
Eleven more companies have agreed to sign the government's Prompt Payment Code, following a meeting with business minister Shriti Vadera (pictured) yesterday.
The firms - including British Airways, Sony UK and Sky - committed to joining the code, which calls for companies to settle supplier invoices within a contractually agreed time and not make retrospective changes to payment terms. Other companies, including HSBC, Sainsbury's and Alliance Boots, "committed in principle" and are expected to sign.
Vadera said in a statement: "Late payment can be the final straw for small business in the current climate. So the commitment by major companies heading supply chains to pay on time is a win for all businesses."
The Forum of Private Business (FPB), which represents 25,000 UK-based private companies, welcomed the news but said too few FTSE100 firms had shown interest in signing up to the code. It was launched by Prime Minister Gordon Brown in December and has around 177 signatories (Web news, 11 December 2008).
The FPB named Argos as the latest company "squeezing" vendors, claiming the retailer charged suppliers up to £15,000 for providing the wrong product information. Argos joined drinks firms Anheuser-Busch InBev and Diageo in the FPB's "hall of shame" this year (Web news, 5 March 2009).
Argos, which has not signed the code, said: "We have been moving towards standardising our payment terms across our business. We believe our terms and other supplier arrangements are in line with the marketplace."
Research published this week by credit management firm Intrum Justitia (Web news, 13 May 2009) estimated if all organisations in the UK public and private sector paid bills on time, the savings generated would be the equivalent of a £39 billion cash injection into the economy.
The government has also come under fire this week over its own payment terms. Intrum Justitia argued public sector bodies have unpaid bills totalling £6 billion. Meanwhile the Scottish National Party accused UK government departments of failing to honour their own 10-day payment pledge (Web news, 11 May 2009) based on figures it obtained from parliamentary questions.