FPB calls for prompt payment for small firms

BUSINESS leaders are urging big companies to treat small suppliers fairly and pay them on time.

The Knutsford-based Forum for Private Business is attending a meeting today to encourage companies to sign up the government’s prompt payment code.

The FPB claims that only eight of the FTSE 100 companies have signed up to the code, and despite writing to a host of companies in the past year to complain about their treatment of suppliers, it says that not a single one has replied to address these concerns.

Chief executive Phil Orford says: “The problem has not been the initiative itself but the attitude of big businesses towards it.

“Not only are many of these companies failing to acknowledge the principles of better payment practices enshrined in the prompt payment code, they are refusing to account for their actions at all.

He added: “It is vital that FTSE 100 companies sign up without delay in order to nurture the certainty and stability that is lacking for small businesses.”

Last week, the retailer Argos, which is owned by the FTSE 100 listed Home Retail Group, was the latest company to be entered into the FPB’s hall of shame for squeezing its suppliers .

Last month, the FPB wrote to Terry Duddy, Home Retail Group’s chief executive, inviting him to sign up to the code. To date, no reply has been received.
However, following coverage of Argos’ entry into the hall of shame on the BBC’s Working Lunch, the retailer denied receiving a letter from the FPB, saying: “We have been moving towards standardising our payment terms across our business and we believe that our standard payment terms are now in line with the marketplace.”

Under the Late Payment of Commercial Debts (Interest) Act 1998, small businesses have a Statutory Right to Interest (SRI), meaning they can in theory charge for late payments. However, few take advantage of this or are prepared to speak out publicly out of fears that large companies will simply take their business elsewhere.