Hold boards legally responsible for late payment, says survey

Will Green is news editor of Supply Management
3 December 2019

More than two-thirds (68%) of UK supply chain managers believe company boards should be held legally responsible for payment terms, according to a CIPS survey.

The survey of 817 supply chain managers also found 16% believed most UK invoices were paid late. Just 5% said all invoices were paid promptly.

Almost two-thirds (64%) believed government moves to ban serial late payers from bidding for public contracts would reduce the problem but “no company has yet been singled out and the supply chain profession believes the government will have to stand by their threat to make a tangible difference to payment culture in the UK”, said CIPS.

The survey found other countries had worse payment records than the UK, with China the worst. A third (32%) of respondents said most payments from Chinese firms were late, followed by the US at 21%. Only 12% believed most invoices from the EU were paid late.

In the summer new powers were proposed for the small business commissioner, including the ability to impose fines. But in October the small business commissioner, Paul Uppal, stepped down from the role. Suzanne Burke has taken on the role in an acting capacity.

Malcolm Harrison, CIPS CEO, said: “While the major political parties are eager to spend big on a range of election promises, we have yet to hear about any new policies to address a problem that money alone cannot solve – late payments. While there are pockets of good practice where payment is prompt, the UK’s rotten culture of late payments is eating away at the core of Britain’s economy. We must act diligently and swiftly to protect SMEs.

“Britain’s supply chain managers are clear that cultural change can only happen when the leaders at the top of Britain’s largest companies are made to answer for their serial late payment and take positive action to tackle the issue. You would not be happy if your employer decided to not pay your wages for 90 days, so why is it acceptable for companies to treat their suppliers in this way?”

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