The life of an SME is often a fraught one, overlooked, harassed and rarely on the end of a good deal. So Vince Cable’s announcement last Month that he will name and shame late payers amongst big business is a long overdue bit of balance in the market.
Cable, whilst not busily planning and denying coups, has said it is time that big businesses are required to publish information on the quality and timeliness of their adherence to payment terms with a particular focus on their impact on smaller business.
It is claimed that UK companies are owed more than £30bn a staggering average of £31,000 per business, that’s a level of overdue debt that all but the largest, most cash generative businesses would struggle to carry.
In working with the Institute of Credit Management and focussing on improving the strength of the currently voluntary Prompt Payment Code, Cable said:
“We will now make it compulsory for companies to publish information about their payment terms so that those who are not playing fair will be shamed into changing their behaviour”
Whilst the sentiment is a positive, Cable has stopped short of implementing the demands of many – for those transgressing companies to be fined for their payment misdemeanours. Cable has also refused to implement the EU directive requiring a statutory maximum of 60 days for paying suppliers.
However he is still retaining these options as potential future actions if the publishing of data does not have the required effect.
Cable added:
“For too long, too many large companies have been getting away with not paying their suppliers on time to maximise their profits. It is small business that is suffering as a result and it needs to stop.”
Small but positive steps for long suffering small businesses.
Given the mantra cash is king, whilst waiting for the hoped for impact of these measures it makes sense for small business to explore all options to reduce their cash flow exposure.
Changing business energy supplier can have a huge contribution to make on this score. Given an average sized SME customer can save nearly £7,000 on a poorly negotiated contract that can seriously eat into the £31,000 average cash burden late payers place on business.
As ever it’s up to SMEs to look after themselves, even in an environment of increased political focus.