Those of us meeting insolvent suppliers with their hair sticking up in the air in worry and shame know the score. It is cashflow, cashflow, cashflow. Getting through to Suzuki in accounts to beg for payment of an invoice is one thing; walking the magic line between that call and money actually being paid into our account is very much another.
How many times have we heard the riposte, "If we had only been paid (1) on time, or (2) at all things would have been very different"? Just like in the school playground, the big boys just don't seem to play fair.
It should be very different. In 2017 legislation was introduced, designed to force large companies to reveal how long they take to pay suppliers. The Government at the time clapped their hands together in a "sorted" gesture and turned their attention to mucking up the economy and shouting at Labour about how well they were doing on education, the Health Service, tax, etc., etc. However new research this month has revealed that these attempts to remedy dodgy payment practices are being widely ignored.
The legislation we refer to above is called 'duty to report', and in the past six years the average time it takes a large business to pay an invoice has fallen by only one day, to 36 days, according to an analysis of official data. (A quick survey of the NTI 'debtors sheet' leads us to think: 36 days?? We should be so lucky ...)
Despite the 'duty to report' being a legal requirement, the number of submissions to the database has fallen every year since 2019, with 15,087 submissions in 2019 but only 12,829 last year. We know big businesses aren't too busy paying invoices of smaller fish to comply with this duty, so what are they doing? News today is that some companies (you know who you are) are ignoring the regulations and failing to report any information.
Terry Corby, which is a solid, reliable name belonging to the CEO of 'Good Business Pays' (yet another sound, sensible monicker) says: “Not only is this against the law, but it is symbolic of a culture of disregard towards the impact of late payments and the rules in place to tackle it. The approach of relying on businesses to police themselves on this issue is failing and more robust penalties are needed to force businesses to properly engage.”
We get it Terry, but big boys bullying in the playground couldn't be told and all they do now is run big companies who don't pay smaller ones on time. The last figures available are for 2022, in which year 26 per cent of payments were made late. Be warned you big boys, a Government review of payment rules was completed this year and is due to report after parliament’s summer recess. The Government indicated it is willing to take a tougher stance on enforcing payment rules. Go Rishi (you have nothing else to do).
As a footnote: if you are taking the Joint Board this November, be aware of the above and make a couple of lines of notes in your 'holistic marks margin'. An awareness of these numbers may well earn you a pass.
