SBEF signs late payment agreement
It's not the first time the UK government has promised to do more to tackle late payment to small businesses, but it seems steps are being taken to help alleviate the problem.
Members of the Small Business Economic Forum (SBEF) have just signed an agreement that will see them develop new measures to ensure payments are made in a timely manner.
Chaired by Business Minister Mark Prisk, the group meets four times a year, bringing together representatives from banks, businesses and government.
The statement encourages all SBEF members to proactively agree payment terms before orders are delivered. It also urges them to use electronic invoicing where possible.
Indeed, e-invoicing can speed up payment times by eliminating errors and ensuring that invoices are sent and received instantly.
Members are also encouraged to raise complaints over late payment from any businesses signed up to the Prompt Payment Code, and to use the necessary legislation to pursue them.
So far 1,115 companies have signed up to the Prompt Payment Code to support their suppliers.
Mark Prisk said payment on time is vital to small firms that rely on their large buyers to thrive, as it allows them to plan for the future.
"Working with industry bodies to encourage their members to sign the Prompt Payment Code and commit to making payments on time is a significant step forward," he remarked.
"We mustn't be complacent and stop here but I hope to see businesses across the country joining us to help ensure payments are reaching suppliers on time."
The announcement comes after research by credit checking agency Creditsafe showed that simple good manners can influence how quickly payments are made to suppliers.
It was found that 45% of buyers will settle invoices more quickly if they are asked to do so in a well-manner way.