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Late payment culture in a company is set at board level
How much are you owed? How much do you owe to others? It may be a tidy sum if a report from the Asset Based Finance Association (ABFA) is anything to go by. According to ABFA research Britain’s small and medium businesses are owed a total of £67.4b in unpaid invoices. Admittedly, not all this money is overdue but the research does add to the growing body of evidence which points to the fact that the late payment directive is simply being ignored by a considerable number of businesses.
Commenting on the research the chairman of the Federation of Small Businesses called for companies to stop using small business as a credit line adding “Late payment culture in a company is set at board level. It’s something that CEOs and board members in big businesses must take responsibility for.”
With businesses increasingly moving towards a culture of innovation in which collaboration at all levels is required, treating suppliers with unthinking contempt by delaying payments is hardly conducive to a good working relationship. Businesses need their suppliers, those suppliers need their suppliers and so on. Failure to pay at any level put pressure on the entire supply chain and when companies are under financial strain their capacity for creating innovative solutions is severely restricted. It’s time we stopped the money-go-round which causes so many problems for so many businesses and instead started to invest in a prompt payment cultur