LONDON: One of the region’s leading companies has called for all businesses to commit to paying their bills within 30 days.
Newcastle-based computing firm Sage has launched a Late Payments Manifesto and an e-petition which aims to get all businesses to commit to monthly payments and reduce the problems facing companies further down the supply chain.
The move comes after The Journal launched its Pay Fair campaign in association with the North East Institute of Business Ethics to highlight the problems faced by companies of all sizes by late payment.
That campaign was boosted by an announcement from the Government at the weekend that a small business commissioner is to be created to help smaller companies chase debts with larger firms.
Sage has become the latest firm to join the debate after research it commissioned showed more than two-thirds of firms have had to wait for 60 days for payment while more than half are having to wait for more than 90. The research found that 70% of owners believe making big businesses commit to 30 days payment terms would have a positive impact upon their business.
Brendan Flattery, Sage’s President Europe, said: “Late payments is the scourge of British business today. For smaller businesses in particular, it can at best cause cash flow issues, and at worst prove fatal.
It is disgraceful how some of the larger firms have historically behaved. We believe all businesses have a right to be paid quickly and on time. That is why we are calling for all businesses – big and small – to commit to 30 day payment terms.”
Previous Sage research on late payments has revealed that £55bn is owed in unpaid invoices in the UK, more than double the number estimated by Government.
The average small business is owed nearly £12,000 in outstanding invoices and one in eight small businesses have experienced “major” cash flow issues to due to late payments.
Carole Theobald, co-chair of the North East Institute of Business Ethics, said: “It’s heartening to see Sage leverage its influence and global networks to say ‘no’ to late payment.
The North East has played an active role in changing business culture for the better. The first step was a Journal campaign to ‘Pay Fair’ in partnership with the North East Initiative on Business Ethics (NIBE) Ltd.
At NIBE we encourage all businesses to pay fair and demonstrate best business practice to create worth and wealth and make the North East known for a great place to do good business. We are delighted to support and promote the Sage Late Payments Manifesto and e-petition.”
Mr Flattery added: “66% of the 2.2m jobs created in the UK economy since 2010 have been from Small & Medium Businesses – the engine room of growth, job creation and prosperity for Britain.
We welcome the news that the Government has appointed a Small Business Commissioner. The UK small business sector is vibrant, but always under pressure. One of the biggest threats is late payments.
