Is late payment a fact of life and here to stay?
Three-quarters of businesses (74%) think late payment is a fact of business life and will always happen, according to new research. But is late payment really here to stay?
A survey conducted by Basware and Mastercard asked 1,015 global businesses about their opinions on late payment and found that, despite knowing the impact of their actions, many businesses still intentionally delay payments.
An overwhelming 90% of respondents acknowledged that payment delays have wider repercussions. But this appears to do little to ease the late payment problem, as 57% admitted delaying payments to suppliers intentionally and 67% said they use payment terms strategically to help manage their own cash flow.
And, with so many businesses putting their own cash flow needs ahead of their supply chain, is there anything that can be done to beat late payment?
The Government has announced a series of new measures which are hoped to help tackle Britain’s late payment culture.
Firstly, tougher reporting laws have been introduced in the Small Business, Enterprise and Employment Bill which will legally require all large companies in the UK to report on their payment practices and policies – a move that is hoped will increase transparency and empower small companies.
Unfortunately, the plans, which were due to come into force in April 2016, have already been delayed until October – a full 18 months after the initial announcement.
Elsewhere, the Enterprise Act, which is now law, will see a Small Business Commissioner introduced who will help small businesses to resolve issues with larger organisations, with a particular focus on late payment.
The key functions of the special commissioner will be to provide information and general advice, offer mediation to resolve disputes and deal with complaints.
It is hoped that both of these measures will encourage bigger businesses to act more appropriately and pay their suppliers on time. But is this really enough to tackle the late payment problem once and for all?
HAVE YOUR SAY: Is late payment a fact of life? Or can it be avoided? Please share your views in the comments below.