Late Payment - FSB 'worst payer' theatens lawsuit
The Federation of Small Businesses’ long-awaited late payment survey became mired in controversy this week, after a telecom company accused of being the ‘worst payer’ in the UK threatened to take legal action.
The FSB’s payment-time league table – based on average creditor days in company annual reports for 1997 or, if possible, 1998 – said World Telecom took 258 days to pay suppliers, making it by far the slowest payer among the 2,500 companies involved. The survey’s average was 46 days.
World Telecom, however, said the 258-day payment average in its 1997 annual report was artificially inflated by an invoice dispute, now resolved, with a ‘major telecoms supplier’. A qualifying note in the report warned against using the figure as a payment average.
In a written statement, World Telecom said it was considering legal action against the FSB over ‘misleading and damaging information’.
Chris Lance, finance director for World Telecom, an AIM-listed company with 300 employees in the UK, said: ‘The survey uses information that is incorrect and the FSB chose to ignore the relevant passage on creditor payments.’
Within hours of the report’s publication, World Telecom auditors Smith & Williamson confirmed the company’s average 1998 creditor days were 115.
A spokesman for the FSB said: ‘We stand by the report. The average payment time was put in by their auditors.’