Large companies must find solutions to the problem of late payment or face UK government action.
Rob Tuckwell, head of B2B and partnerships at Barclaycard, discussed late payment at the Procurious Big Ideas Summit 2019 in the UK, and made a strong case for large corporations to take action to resolve issues.
Tuckwell warned: “At this moment in time there’s £13bn owed to small businesses that are late. As a group of larger businesses and multinational corporates we need to look at addressing this. Late payments aren’t good for anyone.”
Tuckwell’s comments follow chancellor Philip Hammond stating that companies will be required to report on payment practices in their annual accounts.
Tuckwell indicated that the volatility caused by an uncertain Brexit will lead “the availability of credit to go down and the cost of credit to go up”, which will be “most acutely felt by small businesses who don’t have the balance sheet to support them”.
CIPS Group CEO Malcolm Harrison said: “The issue of late payment affects not only the relationship between purchaser and supplier but is detrimental to good supply chain practice.
“Investment in digital supply chains, and automated processes keeping track of payments and suppliers can improve the issue of timely payments but will only be as effective as the will of those managing the process.”
From September 2019, companies that fail to report and prove they pay suppliers promptly will be prevented from winning government contracts.
Recently appointed small business crown representative Martin Traynor has said eliminating late payments is one of his priorities.