Govt to tackle late payments

06/February/2012

The government has launched a crackdown on late payments between businesses.

Mark Prisk, the business minister, today announced a working group of business representatives who will examine issues behind the problem.

The government wants firms and public sector bodies to pay suppliers on time and for small companies to pursue those who put them at risk by delaying.

Among the measures recommended, firms are being urged to proactively agree payment terms before delivering orders.

They are also encouraged to sign up to the government's Prompt Payment Code, run by the Institute for Credit Management, and raise complaints over late payment from Code signatories and use legislation already in place to help companies pursue late payers.

Phil Orford, chief executive of the Forum of Private Business, said: "I'm pleased to see getting paid on time being given the attention it merits as a vital aspect of small businesses' cash flow management."

It follows a recent poll of UK companies published by commercial credit reference agency Graydon, in which 51 per cent of respondents felt late payment had become worse during the past year, with 45 per cent believing it could threaten business investments.