I have, as Baldrick would say, a cunning plan for the next government of whatever political hue they might be.
It’s to sort out the continuing scandal of late payment that bedevils small firms in this country.
Now, I may be doing myself out of some business here, because when small firms don’t get paid, they can get into debt and even go under. And that’s when SJ Collections are called in by creditors to assist in getting at least some of their money back. But I don’t mind. I’d rather not see small firms close because their, often much bigger, corporate or public sector customers won’t pay up in reasonable time.
Now central and local government and the NHS and all the rest of the public sector should know better, which will always tries to squeeze a little extra time before paying up. They have a duty to set an example to the private sector.
And small firms are, I know, loath to impose late payment penalties – to which they are perfectly entitled if clearly stated in their terms and conditions - when invoices are left unpaid. Not surprisingly, they fear losing valuable custom.
The CBI has just put a figure on the amount owing to companies so far this year, and it’s a staggering £32.4 billion, an average of £30,000 per business.
Now the CBI is all for flexibility in payment terms, rightly judging ‘given the diversity and complexity in supply chains … there will be no one size fits all solution to solving late payment’.
But it does want all sides to get round the table to find solutions to the problem. ‘The recent reforms to have large companies publish their payment performance are a step in the right direction. Companies who make an asset out of being prompt payers, like Greggs or Skanska, should rightly be championed as models of good practice.’
So well done those two companies for making life a little more rewarding for their suppliers.
The CBI, while welcoming recent Prompt Payment Code announcements on a mandatory maximum payment term and the setting up of a Standards board, wants more effort to stamp out bad commercial practice that hurts small and medium sized enterprise.
And that also means government departments themselves doing more to hit prompt payment targets that, as the National Audit Office (this link is to a pdf) pointed out in January, are still being missed.
There needs, says the CBI, to be a culture of prompt and fair payment. I agree, and would add that otherwise, next time you need a good job well done, there be no one available to do it. Though I suppose Baldrick might have a cunning plan to deal with that too.