PracticeConsultingLate payment record: 120 days

Late payment record: 120 days

Building services companies are taking as long as 120 days to pay small suppliers in the industry – the worst late-payment record so far uncovered by Accountancy Age.

The latest figures will fuel the late-payment debate which erupted last November when Rentokil Initial issued controversial 60-day payment terms to its suppliers. November’s Late Payment Act allows small companies to charge an interest rate of 8% above base rate on unpaid bills after 30 days if no contract had been agreed.

The construction industry is renowned for lengthy payment times, due partly to long-term building contracts and the web of contractors and sub-contractors. But smaller industry suppliers say the payment terms adopted by the bigger companies are now affecting cash flow.

The 66-member Association of Ductwork Contractors and Allied Suppliers found Co-operative Wholesale Engineering had the longest average annual payment time of 93 days, followed by the How Group (87) and Haden Young and Crown House (79). Crown averaged 120 days for the third quarter of 1998.

The FD of a medium-sized ADCAS member said the Late Payment Act meant some contractors were forced to pay small sub-contractors within 30 days.

This was not an option open to a company of his size. ‘It makes things worse for us and I’m very disappointed,’ he said.

Related Articles

5 tips for SMEs to protect cash flow

Accounting Software 5 tips for SMEs to protect cash flow

3m Alia Shoaib, Reporter
Tyrie on Finance Bill 2017: ‘Making Tax Policy Better’

Consulting Tyrie on Finance Bill 2017: ‘Making Tax Policy Better’

9m Stephanie Wix, Writer
Managing partner Q&A - the year ahead: Richard Toone, CVR Global

Accounting Firms Managing partner Q&A - the year ahead: Richard Toone, CVR Global

10m Kevin Reed, Writer
Friday Afternoon Live: HMRC complaints rise; Deloitte scoops big audits; and corporate reporting woes

Audit Friday Afternoon Live: HMRC complaints rise; Deloitte scoops big audits; and corporate reporting woes

11m Kevin Reed, Writer
New head of equity capital markets for KPMG

Accounting Firms New head of equity capital markets for KPMG

11m Stephanie Wix, Writer
Deloitte 'self-imposes exile' on government contracts to defuse PM row

Accounting Firms Deloitte 'self-imposes exile' on government contracts to defuse PM row

10m Kevin Reed, Writer
Managing partner Q&A - the year ahead: Julie Adams, Menzies

Accounting Firms Managing partner Q&A - the year ahead: Julie Adams, Menzies

10m Kevin Reed, Writer
Friday Afternoon Live: Deloitte's tech thing; PAC wants HMRC 'contingencies'; and Sports Direct

Business Regulation Friday Afternoon Live: Deloitte's tech thing; PAC wants HMRC 'contingencies'; and Sports Direct

10m Kevin Reed, Writer