The rhetoric surrounding the UK’s late payments culture was ramped up another notch this week as an influential Parliamentary committee recommended a mandatory 30-day payment term to stamp out the problem.
Publishing its Small Business and Productivity report, the Business, Energy and Industrial Strategy (BEIS) committee concluded that ‘disgraceful’ behaviour by big firms in particular on payments was seriously hampering output and growth amongst SME suppliers.
It’s a phrase that has become a mantra for personal injury and small claims lawyers. Imported from the US legal system in the mid-90s, No Win, No Fee is the consumer-friendly name given to a method of claims financing officially known as a conditional fee agreement.
It more or less works as the two names suggest - payment is conditional on the case being won. This means litigants don’t have to raise funds up front for expensive legal action, it is the lawyers that take on the risk, and final payment is usually taken as a percentage of the compensation won.
Action Fraud are warning UK based consumers and businesses to be aware of a new type of financial scam, fraudsters claiming to be bailiffs are sending SMS messages or making calls to targets across the UK in the hope of pressuring them to pay fictitious debts.
The scam sees victims receive texts by the fraudsters about the fake debt, claiming that they will "attend your address for resolution" if payment of the imaginary debt is not made.
It feels like we have been here before somehow. Lots of well-meaning words, a tough-sounding stance… and then what? Rinse and repeat.
The latest announcement from the government on the subject of late payment culture has come in the form of a “call for evidence” from Small Business Minister Kelly Tolhurst specifically on how to end the abuse of SMEs by large corporate clients.
It's not often a company like ours faces problems with payments, after all most of our customers are more than happy to be charged by us as this usually means we have recovered what they are owed. But like all businesses we occasionally encounter issues with clients that don't like to pay on time, or in fact at all. That's why we've chosen to open our "2018 Safe Collections - Late Payment Hall of Shame" featuring companies that have failed to honour their agreements with us.
Just under half of large businesses admit to paying suppliers late to protect their own cash flow, according to a new report.
In the UK Business Payments Barometer 2018 survey carried out by Bottomline, 44% of businesses with between 250 and 10,000 employees said they pay invoices late in order to protect liquidity or prioritise other payments.
This comes just a year after the government introduced its Duty to Report (DTR) regulation requiring qualifying large businesses to publish information on payment practices, including average time taken to settle invoices.
Applicable to any company with more than 250 employees, £36m turnover or £18m on the balance sheet, the government hoped DTR would help to tackle late payment culture by bringing the worst excesses out into the open. If these latest survey figures are taken as a gauge, it is yet to work.
Directors who dissolve companies to write off debts, only to start up near identical businesses shortly after, could be banned and fined under new regulations.
The government has moved to crackdown on so-called ‘phoenix companies’ as part of a raft of changes intended to protect employees and pension holders when companies are shut down.
Retail tycoon Mike Ashley has been quick to position himself as champion of the high street after buying House of Fraser out of administration. But whether suppliers, pension holders and even landlords will be celebrating the takeover is questionable.
The Sports Direct owner snapped up the struggling department chain for £90m just an hour after entered administration last week, vowing to keep open at least 80% of its UK stores open.
The government’s much-vaunted ‘Northern Powerhouse’ may have turned out to be little more than a catchy phrase scribbled down on the back of a Chancellor’s fag packet. But at least contractors and small suppliers operating in the North of England’s biggest cities are more likely than most to get paid on time.
In a survey carried out by FreeAgent, small traders in Manchester reported the lowest rate of late payments nationwide. According to the findings, 86% of invoices issued by freelancers and microbusinesses in the city are paid by the due date - which compares very favourably to the national average of 52%.
More than a quarter of UK businesses have suffered negative consequences from another company becoming insolvent in the past six months.
A survey carried out by R3 revealed that one in 10 businesses have suffered a ‘very negative’ impact from a customer or supplier becoming insolvent since the start of 2018, while another 16% reported a ‘somewhat negative’ effect.
The figures come after a sharp spike in the number of companies being declared insolvent in the first quarter of this year. Led by the high profile collapses of Carillion, Toys R Us and Maplin, the number of insolvency cases rose an alarming 13% from the previous quarter.