Pic: Construction Executive
Viability of tens of thousands of businesses in the balance - all caused by rising levels of late payment
Back in the recession hit days of the 1980s and 1990s I regularly suffered from clients for my graphics business who thought paying on 90 and 120 days was acceptable. Some of the worst offenders went bust – like Carillion who used to boast on their website that their terms for some suppliers was 120 days after date of invoice.
Ian Carrotte of ICSM said late payment was one of the biggest issues for small and medium sized businesses as it cripples cash flow.
In the trade construction website Building this week Tom Lowe has highlighted how Vistry is one of the slowest paying housebuilders despite its pre-tax profits. He reported: “Vistry is still one of the industry’s slowest paying housebuilders despite the firm saying it will have more than doubled pre-tax profit when it publishes its 2021 results next month. Latest government data compiled by Build UK showed the firm took an average of 44 days to settle its invoices, with the figure being unchanged from when the data was last reported in July.”
Ian Carrotte said: “It’s a problem that has never gone away and it needs legislation to ensure firms who are clearly in profit to stick to their supplier’s and sub-contractor’s terms of credit and to abide by the Prompt Payment Code. The code is voluntary, but we would like to see it become compulsory as it would increase business expansion and give confidence to businesses that wish to grow.”
Last year, the Independent newspaper listed some of the country’s worst offenders – who also happened to be some of the most profitable companies. They included aerospace firm Meggitt who take on average 132 days to pay most invoices, the C&C Group pay most bills on 120 days, Coca-Cola paid theirs on 83 days and Premier Foods on 76 days.
The Federation of Small Businesses (FSB) reported in a survey of more than a thousand firms that saw late payment increasing. They reported: “The new study of more than 1,200 business owners finds that close to one in three (30%) has seen late payment of invoices increase over the last three months, with a further 8% experiencing other forms of poor payment practice.”
Even worse the FSB said one in ten said late payment was threatening the viability of their business. The FSB said in a statement this year: “Latest government statistics show that there are an estimated 5.5 million small business in the UK – a figure which fell by 400,000 over last year’s lockdowns. The new FSB study suggests that a similar number of firms (440,000) could be forced to close again this year due to late payment alone.”
ICSM has introduced free legal letters for chasing up overdue invoices and a free micro debt service to secure payments of a smaller invoices that have not been paid for months or even years. They also offer a highly respected and successful debt recovery service that brings in hundreds of thousands of pounds for businesses struggling to get paid.
Harry Mottram
About ICSM Credit
ICSM Credit has more than four decades of experience as a credit intelligence group whose members gain inside information about firms in trouble allowing them to avoid bad debts and rogue traders. To join costs less than a tank of fuel - while at the moment there's a special free temporary membership offer during the Covid-19 crisis which gives access to free legal letters. ICSM also has an effective debt collecting service which has a global reach - ask for details from Paul.
For details about ICSM Credit call 0844 854 1850 or visit the website www.icsmcredit.com or email Ian at Ian.carrotte@icsmcredit.com on how to subscribe and to join the UK’s credit intelligence network to avoid bad debts and late payers. Follow ICSM Credit on FaceBook, Twitter and YouTube and Ian Carrotte on LinkedIn.
To keep up to date subscribe to the FREE ICSM Credit Newsletter to hear all the latest insolvency news and to see who has gone out of business click on the orange panel on the top left of the home page of the website www.icsmcredit.com or send an email to Ian.carrotte@icsmcredit.com
For details for the work of the journalist Harry Mottram visit www.harrymottram.co.uk