Corporate bullies who do not pay bills on time are forcing companies out of business in Yorkshire. These claims have been made by the FSB(Federation of Small Businesses) Chairman Gordon Millward, who made the comment following research which revealed Britain’s medium-sized businesses are owed over £35bn of bad debts, £2bn higher than six months ago.
785,000 SMEs across the UK experienced problems in December, following late payments. Of these 168,000 companies were in the north of England. The combined debt of the late payments was higher than ever, even though the number of companies experiencing late payments was smaller than six months previous.
The average SME in northern England was owed £30,000, less than the UK average, £45,000. Bacs research indicates that many large businesses do not pay on time. Big companies are often the worst offenders, compared to small or private companies, say 41% of SMEs.
The FSB want the Government to make sure that all small firm within 10 days. Contractors used by the public sectors need to pay within the same time and companies are urged to adopt the Prompt Payment Code. Time wasted by small business owners chasing late payments can be up to 6 hours per week, so companies are being urged to charge interest.
Bacs spokesman, Mike Hutchinson, says that the research has highlighted challenges faced by small companies. It is imperative that companies maintain a healthy cash flow. A government spokesman added that legislation was not enough. Practical solutions need to be adapted to make sure companies are being paid in time. Over 1,000 businesses are signed up to the Prompt Payment Code, which is fully supported by the Government.