The Federation of Small Businesses (FSB) has welcomed an announcement from the Government that it intends to crack down on bigger businesses which have poor payment practices towards their smaller suppliers and contractors.
Ministers have listened to FSB’s calls to make company boards accountable for their payment practices; to increase the powers of the Small Business Commissioner; and to strengthen the Prompt Payment Code.
Speaking in response, FSB National Chairman Mike Cherry said: “Late payments and poor practices are a scourge which leads to the closure of 50,000 small businesses a year. Today’s measures will for the first time see the culprits brought to account.
“When small firms are paid late, it causes financial hardship and stifles growth. Everyone deserves to be paid on time when they have done the work and provided the goods and services requested. No one should have to wait months on end to receive the money they’re owed.
“By forcing audit committees of big businesses to report payment practices in company annual reports, there will be no more covering-up by those who treat smaller suppliers shabbily.
“FSB has long campaigned for the measures announced today, and it is very welcome to see them being put into action.
“We will continue to work with the Small Business Commissioner as he seeks to make full use of his new powers.
“Ending late payments and poor practices is not only the right and fair thing to do, it will also spare small firms the financial impact of waiting for the money they’re owed, and instead allow them to invest and grow.”