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FSB calls on big business to end late payments

Wednesday 13th June

Mike Cherry, National Chairman of Federation of Small Businesses (FSB) has sent a letter to all FTSE 100 companies urging Chairman and CEOs to take action by agreeing to lead the way in stamping out poor payments

The letter calls on these companies to work with small businesses to help foster a new payments culture in the UK.

Research from FSB shows the hugely damaging impact these practices have on small firms within supply chains with data showing that the vast majority (84%) of small firms report being paid late, with a third (33%) saying at least one in four payments they’re owed arrives later than agreed.

A similar proportion (37%) state that agreed payment terms have lengthened in the past two years, hampering cash flow. Only four per cent say payment terms are improving. 

FSB is calling for a non-executive director on boards to be given a specific responsibility for good supply chain practice including making sure the firm is opting to follow best practice and lead the way.

FSB National Chairman Mike Cherry, said: “These practices are putting small businesses at risk forcing many to turn to personal credit cards or overdrafts just to survive. Sadly, we estimate late payments lead to 50,000 small businesses a year closing their doors, costing the economy £2.5 billion annually.

“Small businesses have the support of Secretary of State for Business, Energy and the Industrial Strategy, the Chancellor of the Exchequer and the Prime Minister in their mission to stamp out poor payment practices. The time has now come for big business to get on board with this mission and strive to be champions of good payment practice. My door is open to any business looking to work with small businesses to get this right."