FSB’s warning over failure to tackle late payment
Late payment – which is known to put a major strain on the finances of smaller companies – is not getting the attention it deserves, an influential lobbying group has warned.
The Federation for Small Businesses (FSB) said that ministers were failing to tackle the key problems which contribute to late payment practices in the UK.
Recent research, conducted by FSB officials, has shown that a third of payments to Britain’s small firms are late. Businesses will, on average, have to wait one month for the money they are owed.
Mike Cherry, the FSB’s national chairman, said that the situation continued to cause major difficulties for small businesses already struggling with their cash flow and had a wider effect on the UK economy as a whole.
“Progress to tackle the UK’s poor payment culture has been too slow,” he said.
“[The recent] announcement of the next step for the Small Business Commissioner is necessary but not sufficient to tackle the £26.8 billion currently held up and not paid to small suppliers.
“The new Commissioner must have the confidence and respect of the entire business community and the strength to take on large businesses where necessary.”
The insolvency trade body R3 has previously suggested that around 20 per cent of all corporate insolvencies are caused by late payment.