The Forum of Private Business (FPB) has called
for tighter controls on late payment to prevent small businesses
from falling victim to unscrupulous behaviour from larger companies.
In
a speech to the Association of Credit Professionals, FPB chief
executive Nick Goulding claimed suppliers to supermarkets and big
high street retailers are suffering.
"There is a growing trend for large retailers to pass the cost of
difficult trading periods or even expansion onto their suppliers," he
said.
"There is no protection for these companies who live in fear of large
customers taking away their trade should they refuse to comply.
It is wholly unacceptable that these unfair practices go on unchecked,
they are abuses of buying power."
Goulding called on the government to do more to help small
firms understand their rights on late payment.
Under the Late
Payment of Commercial Debts (Interest) Act firms are entitled
to a Statutory Right to Interest (SRI) at 8% above
the base
rate for late payment of commercial debt. However, under current
legislation, applying SRI is optional, something that the FPB
would like reviewed.
"The European Late Payment Directive is currently under review, and
the FPB would like issues such as the mandatory imposition
of the Statutory Right to Interest looked into," Goulding said.
"This would remove the fear of small firms imposing interest on late
paying customers and whilst we recognise some small firms are
also slow to pay, quite often that is because they are passing delays
in cash flow on to their suppliers."
Goulding also called for more power to be given to the Better
Payment Practice Group, a forum of representatives of businesses,
banks
and payment systems professionals.
< back to News headlines
