Member Article

Chamber backs Government's prompt payment plans

The region’s largest business membership organisation has backed Government plans to speed up payments between businesses.

The North East Chamber of Commerce responded to the Government’s late payment consultation, which outlines plans to mandate prompt payment all the way down public procurement supply chains.

NECC also believes this must be accompanied with enforcement and oversight mechanisms to ensure payment terms are not lengthier further down the supply chain, as well as action to address late payment in the private sector more broadly.

NECC policy advisor, Rachel Travis, said: “Prompt payment is vital to businesses and supply chains. Without quick and effective action, the severe administrative and financial burdens late payment places upon businesses will slow investment, employment and damage economic growth.

“There are North East firms taking the lead on challenging late payment and recognising that paying suppliers on time is a competitive advantage. The Government and the public sector more widely should recognise the contribution these companies can make to the prompt payment agenda.”

Figures released by BIS in 2013 show that 85% of small businesses have experienced late payment in the last two years and are owed over £30 billion in late payments.

Rachel added: “The Government’s commitment to push the prompt payment agenda is welcome, but more must be done for businesses to experience real benefit on the ground.

“The cash flow problems created by late payment are often exacerbated by the difficulties businesses have in accessing finance. Banks and regulators must ensure that cost-effective credit facilities are in place, available on reasonable terms and are visible to businesses.”

Esh Group chief executive, Brian Manning, a keen advocate of prompt payment, said: “At Esh Group we monitor closely our payment days to suppliers and subcontractors to ensure that our businesses are paying promptly.

“We see supporting the supply chain as vital in the current climate as this generates loyalty and goodwill which no doubt will give a commercial edge.”

This was posted in Bdaily's Members' News section by North East Chamber of Commerce .