Following the news that the Small Business Commissioner is strengthening the Prompt Payment Code, Xero UK MD Gary Turner has spoken out on the need for small firms to be treated more fairly.
“In an age where we can use our thumbprint or a selfie to pay instantly, how is it still acceptable that large businesses pay suppliers months later? We support the measures the government is taking to enhance the prompt payment code, but this should be the first step in a longer cultural shift.
“If we're going to rebuild the economy, small businesses must be able to have and use money that's already theirs. We've been calling on the government for a ‘fair buyers bill’ to stop corporates increasing payment terms. 30 days should be the maximum standard for payment terms. Yet in the last year, 59% of small business owners said that corporate customers increased the length of their payment terms.
“This is the next ethical issue corporates need to address. Poor cash flow is the number one reason that businesses fail, and this is often tied up in late payments.
“After a devastating year any moves to treat small firms more fairly should be welcomed.”