The Analysis News & Opinions


Debate draws near as payment campaign proceeds


Senior credit professionals were preparing to meet for a round-table debate, this month, as the campaign continues to encourage businesses to improve payment times. The debate


is being run by


CCRMagazine in association with Else Solicitors. Partner, Chris Else explained that there was currently a significant movement of businesses, in the Greater Birmingham and wider West Midlands Chamber of Commerce area, being encouraged to support the local economy by pledging to pay suppliers within 30 days. ‘Pay in 30 Days’ is a new initiative which


has been launched to tackle late payment – one of the biggest issues facing the area’s small and medium-sized enterprises. A recent survey found that, on average,


more than £200,000 is regularly owed to businesses in the West Midlands, which, in some cases, can mean the difference between success and failure. Companies often find themselves waiting 90, or even 120, days to get paid for services and products.


SME hope


Almost half of SMEs (49%) across the manufacturing sector have aspirations for growth over the next three months, compared with only 31% six months ago, immediately after the EU referendum, according to the new quarterly research from Hitachi Capital’s


British


Business Barometer. The percentage of SMEs anticipating


decline is also down from 12% to 9%, suggesting improved levels of confidence within the sector. Gavin Wraith-Carter, managing director


at Hitachi Capital Business Finance, said: “Confidence levels among SMEs in the manufacturing sector took a dip around the time of the Brexit vote. However levels have now bounced back to higher than those of a year ago.”


April 2017 ‘Pay in 30 Days’ aims to turn the tide on


late payment by promoting best practice throughout the local economy. Although it is not legally binding, companies signing up to the pledge aim to show their commitment to pay suppliers within 30 days, or within agreed contractual terms. Mr Else said: “If every business improved


their payments to suppliers, it would have a massive impact on the local economy across the entire spectrum of sectors. Businesses would have more money to spend on growth and employment. “As well as helping to improve their


corporate social responsibility, signing up to the pledge would also make businesses more appealing as a potential trading partner and could result in them winning a contract above the competition. “Small businesses account for more than


50% of all businesses and, if we want the economy to grow, we need them to have the cashflow to pay staff, overheads, crown taxes due, and, crucially, leave enough to grow.”


Chris Else Stephen Kiely, editor of CCRMagazine,


added: “It is good to see such initiatives moving forward. It really goes to show the importance of the work that is done by today’s credit professionals, in ensuring their companies’ cashflow, which will be up for discussion at this month’s debate.”


‘Businesses should use challenge process’


Businesses owed money by the Ministry of Defence (MoD) should channel complaints through the Prompt Payment Code for a rapid resolution, it has been claimed. Speaking after firms had complained


about the MoD’s payment practices, Philip King, chief executive of the Chartered Institute of Credit Management (CICM), said he was disappointed that not a single firm, reported in the press, had sought redress through the code’s challenge process. He added: “The Prompt Payment Code is


an established mechanism for dealing with late payment, but not enough people know about the challenge process to keep signatories in line.


www.CCRMagazine.co.uk “Challenges against code signatories have


been hugely successful in achieving fast settlement of invoices, creating dialogue between parties, improving contract terms, and providing constructive assistance welcomed by suppliers and signatories alike. But much more needs to be done to get that message across.” The Prompt Payment Code


is


administered by the CICM on behalf of the Department for Business, Energy and Industrial Strategy. Each signatory to the code commits


to best practice in the fair and equal treatment of suppliers, many of whom are smaller businesses.


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