Partner Article

RDA backs prompt payment campaign

A campaign to help stop small businesses failing due to late payments has received the backing of regional development agency One North East.

Last year, 137 North East firms went out of business due to late invoice payments. The payments also cost companies £19m in unnecessary interest.

One North East is supporting the Government’s Prompt Payment Code, which highlights the importance of a quick turnaround of invoice payments.

The agency itself has also signed up to pledge, and aims to pay 99% of its invoices within 10 working days.

One North East chief executive Alan Clarke said: “Cash flow is the lifeblood of business and one of the key causes of business failure. One North East work extremely hard to promote good practice in invoice payment and pride ourselves on our own record.

“I would encourage all organisations and companies to sign up the Prompt Payment Code. If every organisation and business pays its invoices within 10 working days it will play a key role in our recovery from the recession and ensure dozens of firms stay afloat.”

The Federation of Small Businesses’s regional organiser for the North East, David Longstaff, said: “More than a third of small businesses are waiting longer to be paid for private sector work.

“This comes despite the Government-backed Prompt Payment Code, which called for fairer payment practices between large and small businesses.

“With around 120 businesses nationwide closing a day, effective action must be taken to show larger businesses that small firms here in the North East are not external sources of credit for the convenience of larger firms.”

This was posted in Bdaily's Members' News section by Ruth Mitchell .