The FPB calls for tighter controls on late
payment
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.
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