The FSB has recently written to its members drawing attention to its campaign against late payments. The text of this letter follows:


Research published from the Federation of Small Businesses (FSB) makes clear the scale of the UK’s payment problem and The Federation of Small Businesses sees the Government’s proposal for a Small Business Commissioner to help tackle late payment as a step in the right direction.

The Prompt Payment Code for addressing the UK’s deteriorating payment culture does not have the confidence of much of the small business community. The FSB’s latest research found that only one in five (21%) FSB members are confident the Prompt Payment code will be enough to address the UK’s poor payment culture.

When asked if they would support a full and independent inquiry into poor payment practices, more than half (60%) of businesses supported the proposal. This FSB data helps to illustrate the problem; two fifths (39%) of businesses questioned were on average offered terms longer than 30 days for payment. On top of excessively long payment terms, 43 per cent of firms said they have waited over 90 days beyond the agreed payment date before they got the money they are owed.

As part of the survey, FSB members were also asked to give reasons why their customers paid late. The top five reported reasons were: no excuse or justification was given (49%); internal invoice processing issues caused a delay (35%); the customer extended the payment terms without your consent (34%); invoice was lost or misplaced (33%); invoice was never received (31%).

John Allan, National Chairman, Federation of Small Businesses, said: “If businesses do not get the money they are owed, they may not be able to pay their staff, invest in their business or pay their own suppliers. There is a knock-on effect right down the supply chain, which undermines the UK economy as a whole. Late and poor payment practices are holding back our economy and pushing potentially successful firms out of business.”