Pay your bills on time
Large companies and their directors will face criminal proceedings and fines if they do not disclose twice a year their treatment of suppliers, as part of the Government’s desire to eradicate bad payment practices which are blamed for thousands of business failures every year. Under new rules, large entities will have to publish details of their payment practices and performance on a website that is being established by the Department for Business Energy and Industrial Strategy.
Of course, there are many ways in which one can manipulate the figures in terms of demonstrating adherence to a 30 or 45 day payment profile. Further, many small companies are reluctant to complain about slow payment lest they are removed from the supply chain.
A recent survey by the Federation of Small Businesses estimated that if suppliers were paid on time nearly 50,000 business failures could be averted each year across the UK, but until either a company or a director is subject to conviction and a fine, one suspects that many small businesses will be reluctant to believe that the new legislation will have the desired effect.