Rentokil Initial this week privately offered to improve its small business payment terms while publicly insisting it was standing by a controversial 60-day payment ultimatum.
The conflicting messages came as the company struggled to defend its reputation as a champion of prompt payment following last week’s revelation in Accountancy Age that it was demanding small suppliers exempt themselves from the 30-day payment protection contained in the Late Payment Act.
The disclosure prompted calls for Rentokil chief executive, Sir Clive Thompson, to resign as CBI president.
Rentokil’s offer of new flexibilty came on Monday in a telephone call to SME pressure group, the Private Business Forum. The company said it was sticking to a 60-day policy, but was prepared to increase its 1% interest rate for overdue balances, to match the overdraft rates and administrative costs met by small companies.
On Tuesday, Rentokil denied making the first move and said its terms were unchanged. It added, however, that, in line with the Act’s requirement to pay ‘substantial interest’ on overdue balances, it was prepared to pay interest at a rate ‘not less than a small supplier would pay to the bank’.
While 1% was appropriate for big suppliers, the company recognised that ‘small suppliers need a different interest rate’. A spokesman insisted that Rentokil’s position had been ‘consistently clear’.