Late Paying Firms – Database Goes Live

Back in 2013 we were talking about Pete Loughlin's (of Purchasing Insight)  idea about using social media as the new weapon to combat late payment.  He refers to the scandal of late payments and their devastating effects on the businesses that suffer at the hands of late payers, suggesting they could use social media as a way to redress the balance of power between the big buyer and the smaller supplier. In a call to action he summarises:

Businesses that deliberately pay their suppliers late as well as those who fail to invest in purchase-to-pay best practice should absolutely be named and shamed. The culture of late payment should no longer be tolerated and governments should play a more high-profile role in encouraging business to arm themselves with the types of tool and technologies they employ so effectively to get money in the door to deal with their suppliers efficiently and with respect.

Whether naming and shaming is an effective (or even fair) mechanism for making 'late payers' change their approaches, and prevent the practice, is up for debate, but the Government's database of late payers, will, hopefully, begin to turn the tide.

Last year it became mandatory that most firms (there are exceptions) incorporated in England and Wales, with either a turnover of £36 million and above, or £18 million balance sheet, or employing 250 employees, publish payment practice reports twice a year. This 'Duty to Report’ includes disclosing how long it takes the firm to pay suppliers' invoices, their terms and practices. So the Government is making steps towards tackling the problem, which negatively affects both supplier and payer: possibly devastating the former and adversely affecting the reputation of the latter, with risks of compensation claims, late payment charges and relationship failures to boot. (Although whether this is of great concern to the very large payers is another matter!)

Either way, the chairman of the Federation of Small Businesses welcomed the move saying the ruling could save up to 50,000 small businesses a year.

Now, after some wait, the Government has published its web-based service from which all these reports can be searched and downloaded. For a change, smaller firms can scope out larger businesses, and look at their payment 'credentials' before deciding to supply to them. So, nowhere to hide for the worst offenders as This Is Money website reports, extracting the top 10 culprits of failure to pay on time, and names and shames them in a table.

To be fair - it does also point out that sometimes 'late payment' depends on the definition, that sometimes it can be due to more than just incompetence or lax attitudes, highlighting cases of invoices being paid on time but missing the deadline by the time it is cleared in suppliers' accounts, for example.

As one commentator points out - it might have been more effective to produce a list of the companies that do consistently pay on time; it would make for a much shorter list!

The portal can be found here on Gov.UK

Discuss this:

Your email address will not be published. Required fields are marked *