Originally written by Timothy Adler on Small Business
Government reforms to pressure large businesses to pay small business suppliers on time do not go far enough, say experts.
Small Business Minister Kelly Tolhurst announced yesterday that entire corporate boards will be culpable if large businesses do not pay SME suppliers on time, not just finance directors, as previously mooted.
Large businesses could also be fined for failing to pay small and medium-sized business suppliers on time, as part of a Government crackdown on SME late payments.
The Small Business Commissioner could have beefed-up powers to tackle SME late payments and enforce binding payment plans.
However, the Government has ducked compelling large employers to sign the Prompt Payment Code and to close the late payments window under the code from 60 to 30 days, say professional bodies.
Malcolm Harrison, group CEO of The Chartered Institute of Procurement and Supply (CIPS), said: “More change is necessary. It is important we do not stop there and continue to drive down lengthy payment terms in supplier contracts to ensure SMEs are able to manage their cash flows, to grow their businesses and remain productive.”
Lengthy payment terms
Peter Kubik, partner at accountants UHY Hacker Young, said: “New proposals do not get to