Late Payment – Week of turmoil for Rentokil

Rentokil Initial’s apparent change in its payment policy for small suppliers ended an extraordinary week of speculation and counterclaim following last week’s exclusive story in Accountancy Age.

On the day Accountancy Age published details of Rentokil’s ultimatum to small businesses, the story was picked up by The Times. Rentokil FD Christopher Pearce denied claims that his company’s 60-day payment policy with 1% interest on overdue balances amounted to bullying tactics and defended Rentokil’s membership of the Better Payment Practice Group.

After receiving letters of complaint from other Rentokil suppliers about the circular, Nick Goulding, of owner-managed business group the Private Business Forum, wrote that day to the CBI calling for the resignation of Rentokil chief executive Sir Clive Thompson as CBI president.

On Friday, in the face of mounting criticism, Rentokil spokesman Charles Grimaldi appeared on Radio 4’s Today programme and announced that Rentokil would pay small suppliers an interest rate equal to the rate they were charged by their banks.

Tackled about this apparent departure from the original 1% stance, Grimaldi denied a U-turn, adding that his comments were intended only to ‘clarify widespread misunderstanding’ about the nature of the Late Payment Act.

But his apparent concession failed to stop national press reports. The Mail on Sunday ran a story highlighting Goulding’s call for Thompson to resign as CBI president and describing his company’s ‘humiliating climbdown’.

It also reported that Rentokil was among the country’s worst late payers, settling bills an average of 19 days after agreed terms, compared to an industry average of 14 days.

On Monday, Goulding reported he had been telephoned by Rentokil seeking to agree a statement of small business payment practice. Grimaldi denied the company had made the call, insisting that Goulding had initiated the contact.

Analysis, page 10.

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