The videogames industry is a key contributor to the post-industrial UK economy, at a time when the creative industries and services sector are steadily growing in importance.
But safeguarding this contribution means ensuring the continued health of companies working in the industry - and the sector's representative body TIGA (The Independent Games Developers Association) is doing just that by encouraging all those working in the videogames sector to sign up to the Prompt Payment Code and avoid late payment.
This outlines three commitments for signatories to stick to:
1. Pay suppliers on time
- within pre-agreed contract terms
- without retrospectively changing those terms
- without treating smaller companies differently from larger ones
2. Give suppliers clear guidance
- by providing clear guidance on payment procedures
- by creating and publicising a process for payments-related complaints
- by advising suppliers promptly if an invoice will not be paid as agreed
3. Encourage good practice
- by encouraging companies at the top of the supply chain to promote its uptake further down
Supporting the videogames sector
The videogames sector has long been recognised as a key part of the UK economy, and is treated accordingly - with tax breaks for new game developments, for instance.
However, like any industry, its participants are subject to the dangers of restricted cashflow, and keeping funds moving throughout the supply chain is an important element in overcoming this problem.
Dr Richard Wilson, chief executive officer of TIGA, has chaired the Better Payment Practice Group in the past, and says TIGA is "taking the lead" in tackling the issue of overdue payments.
"TIGA aims to strengthen the UK games industry - reducing the incidence of late payment of debt is an important way of achieving this goal."
The organisation is now inviting feedback from its members about whether they have ever been subject to unfairly late payment, with a Facebook page and Twitter account for responses to be sent to.
At Safe Collections, we're always happy to handle any enquiries from companies in the sector who have any concerns about late payment - we've worked with organisations throughout the industry in the past, and know the specific issues faced by creative firms, and particularly those whose products are digital rather than physical.
The Scale of the Problem
According to TIGA, more than one in four companies working in the videogames sector have been prevented from growing to their fullest potential due to delayed payments on invoices issued to their customers.
Facebook user Georgina Mackenzie responded to this figure, saying: "Only 26%! That seems like quite a low number."
However, at a time when the UK's economic growth is measured in tenths of a percentage point, the prospect of more than a quarter of one of its biggest sectors being better placed to achieve full growth could have ministers and business leaders alike keen to see invoices settled sooner.
TIGA points out that the negative impact of late payments not only has an effect on cashflow - it also wastes extra man hours as companies spend time chasing invoices that might be better spent elsewhere.
"Without prompt payment, some developers owed money could end up closing," TIGA adds.
With the UK economy already balancing on the brink of positive growth, supporting major industries such as videogames development through tax breaks and the Prompt Payment Code could prove to be an important step in helping Britain to re-establish a firm economic base from which to develop future growth.
At Safe Collections, we are proud of the work we have already done to support digital and creative firms, and will be doing our part to help the industry to deal with any interruptions to payments in the months and years to come. If you have issues with late payment contact us for a no obligation review of your options.