Late payment by top UK companies forced as many as 10,000 small to medium-sized businesses into receivership last year, a new survey claimed this week.
A league table naming and shaming late payers, for the Federation of Small Businesses, reveals there has been no improvement by UK plcs in speeding up bill payment despite new legislation in 1998.
Only one in three businesses are paying its bills on or within the 30 days, specified by the Late Payment Act, with average payment times the same as last year at 46 days.
Companies were found to have taken as many as 647 days to pay suppliers.
However, others behaved better. Alpha Plant, for example, topped the building sector table with a prompt three day target.
Senior analyst Philip Mellor of Dun & Bradstreet Corporation estimated 10,000 out of 26,000 businesses failures each year are due to late payment rather than tough business conditions or bad management.
Hard-pressed manufacturers emerged from the survey of more than 3,140 UK plcs as most likely to delay payment of supplier. The Late Payment Act allows small companies to charge interest of eight per cent above the base rate on bills unpaid after 30 days, unless prior agreement has been reached. A supplier can take a contractor to court if it ignores demands for interest.
Retailer House of Fraser last year courted controversy when it imposed a 75-day payment term on its suppliers.
Late payment background www.accountancyage.com/Business/602154 www.fsb.org.uk.
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