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Business News President’s Focus


Lichfield & Tamworth Chamber of Commerce president James Blackman is a fierce campaigner for businesses being paid on time. The issue of firms failing to adhere to payment terms inspired his ‘Pay In 30 Days’ pledge – a long-standing theme of his presidency. Here, he discusses the moral and ethical issues of withholding payment.


general. My business has been running for nine years


T


this June and the biggest issue is cashflow and getting paid on time. Most of our clients now pay within 33 days of invoicing – and we have made it very clear that we will not undertake work unless we have it within a contract that they adhere to payment terms. However, as we grow, we’re starting to work


with larger companies which now have some very antiquated and backward processes for payments. PO numbers have to be present and must be


sent by ‘X’ date to get processed. Payment is ‘X’ days after end of month – and so on. Hold on…If you’re wanting our services you


then work to how we want to get paid, not how your systems are set up. I can very easily pay any of my suppliers without issue without delay, so why does it take 60 or 90 days to get paid? I am hearing more and more micro and small


businesses complaining about payment terms and the games you have to play to get paid for the services you provide. Last year, I went on a financial processes


course. I need to become more clued up on taxation and understanding balance sheets (no - at school they didn’t teach us this and only through trial and error you learn). The course trainer was actively saying that


you should hold on to the money in your bank account for as long as possible. Delay payments to suppliers so that your balance sheet looks good…I had to challenge this. If you’ve got the money in your bank, you


should pay your suppliers, as you’re holding up a supply chain and possibly preventing someone paying their mortgage or giving a salary to staff to feed their family.


‘£22bn is owed in late payments. I have said this before - that’s a lot of money which can go back into the economy’


Looking on the government website at the list


of companies who have to report the payment terms, it is absolutely shocking how many are holding on to the cash…paying later than 30 days. If we took EE for example or Tesco or any retailer, you have to pay for the goods when you leave their shop or pay on a specific date to use their services. How is it right for the same company to turn around to its suppliers and say ‘we will pay you


10 CHAMBERLINK December 2019/January 2020


his article may ruffle a few feathers but, to be honest, it needs to be said, as really it will help the greater good of business in


James Blackman


quickly if you give us 10 per cent discount, or you have to wait 60 or 75 days before your paid’? Do us consumers start walking out of Tesco


with a full trolley and say we want 10 per cent off the lot and we will pay now, otherwise we will pay you in 60 days if we feel like it? You’re probably saying that’s not the same… that would be theft. But how is it actually different? It’s not. The business has entered into a contract with


another business to provide a product or service. The supplier then expects to get paid on time, on delivery of that product or service. £22bn is owed in late payments. I have said


this before - that’s a lot of money which can go back into the economy and help improve salaries, employment, more tax back into the system to help the health service, bolster the high-street and business as a whole. Let’s take Germany - this is enshrined in the


law. When a service has been provided, a bill is sent. Usually this bill contains the date by which you have to pay for the service. Whenever there is no date on the bill, the §286 III BGB (German Civil Code) is applicable. According to this paragraph, the debtor must pay the bill within a period of 30 days after


receiving it. So if our partners in Germany can enforce this in law, why can’t we have similar legislation to stop blue-chip companies from stifling growth? As a director of a company you need to ask yourself the following:


• If you got paid every 60 to 75 days, would you be happy with this?


• What physical and mental stress would that put on yourself?


• How much burden does that stress put on the NHS and support services?


As a shareholder within a company, would you


prefer to know that the company you invest in is ethical and morally responsible and that they’re being profitable by trading on a level playing field and not holding smaller and other organisations to ransom by delaying payments?


To support this campaign follow @payin30days and retweet #payin30days.


You can also download the badge to show your support from www.payin30days.co.uk


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