Businesses want late payers named and shamed
Cash-strapped British businesses have declared their support for business minister Michael Fallon’s proposals to name and shame the members of the FTSE 350 refusing to sign up to the Prompt Payment Code.
Sixty-nine per cent of business owners and finance directors questioned in Hilton-Baird Collection Services’ annual Late Payment Survey believed Mr Fallon was doing the right thing in threatening to disclose the names of those ignoring repeated requests to join the code.
This support comes after their businesses had to wait an average of 21 days beyond agreed credit terms to be paid by customers during 2012, according to the research conducted by the leading debt collection agency. This represents an increase of four days from 2011 and highlights the escalating problems businesses are facing with regards to getting paid on time.
Thirteen per cent of businesses said they were forced to write off more than 5 per cent of their turnover over the past 12 months, with 38 per cent classifying over 10 per cent of their debtor books as more than 90 days old.
Managing Director of Hilton-Baird Collection Services, Alex Hilton-Baird, commented: “Businesses are firmly behind Michael Fallon’s attempts to encourage the country’s largest firms to improve their payment performance. Whether this will have any effect remains to be seen, however, as it isn’t just large corporates that are culpable. Late payment is occurring right the way through the supply chain.
“These numbers are simply unmanageable for the vast majority of businesses, particularly when you take into consideration the range of other pressures on their cash flows at present. In many cases businesses are having to wait more than 60 days, sometimes more, to be paid after providing goods or services. Given this, it is obvious why the economy is caught in a state of flux.
“It is absolutely essential that businesses of all sizes use the most appropriate credit management strategies in the coming months to safeguard their cash flows against this critical problem.”
Note to editors:
Hilton-Baird’s latest research was undertaken among 319 businesses across a wide variety of business sectors, providing a representative sample of the UK’s SMEs. The research was conducted in January 2013, with the results providing a snapshot of businesses’ experiences with late payment and the steps they are taking to safeguard their cash flows against the challenge. The full report can be found here.
Alex Hilton-Baird is Managing Director of Hilton-Baird Collection Services, which is part of the Hilton-Baird Group of companies. Established in 2001, Hilton-Baird Collection Services provides award-winning outsourced debt collection services to the UK’s SME and corporate markets, as well as some of the most respected invoice financiers, leading banks and insolvency practitioners.
Hilton-Baird Collection Services was voted Commercial Debt Collection Agency of the Year in 2008, 2010 and 2011 by Credit Today magazine. In addition, two of our employees have been awarded the Commercial Collector of the Year title, with Team Leader, Charlotte Christie, winning in 2010 and Senior Collections Advisor, Peter Hepburn, winning in 2012. Such awards are testament to the continuous investment Hilton-Baird puts into making its debt collection services the best on the market, with regular training and technological innovation at the core of ensuring a fast, flexible and efficient response to business debt recovery needs.
To find out more about how Hilton-Baird Collection Services can assist, visit https://www.hiltonbairdcollections.co.uk.