All change in payment terms but what SMEs are really looking for is 30 days
Beatrice Bartlay, Managing Director of specialist staffing firm 2B Interface.com has spoken out about one of the biggest issues confronting SMEs – the impact that late payment has on the cash flow of UK Plc.
Despite the fact that the Department for Business, Innovations and Skills announcing that amended late payment legislation has come into force on 16 March 2013, many small businesses are still facing crucifying payment terms as a result of larger companies demanding greater flexibility at the time of a contract being awarded.
Beatrice Bartlay, Managing Director of 2B Interface, stated:
“We are missing simple, practical, no-cost help to small businesses. A simple piece of legislation that insists that all payment terms have to be 30 days. What is strangling small business and economic recovery is the demands being placed on smaller companies by larger players at the contract stage – and that is not even debated and raised by the Business Department.”
The new legislation introduced and now in place as of this week, implements European Directive 2011/7/EU on Combating Late Payment in Commercial Transactions. The amended legislation will make pursuing payment a simpler process across the European Union, reducing the culture of paying late and making paying on time the norm.
The Department for Business, Innovation and Skills itself states that “Evidence suggests that the best way of securing timely payment is to agree terms in advance of the transaction and to invoice timely and accurately – effort therefore needs to be focused upon managing customer relationships and managing cash flow.”
“This is nothing more than la-la land. It is at the negotiation stage that the damage is done. For far too many small businesses the reality is ‘accept our terms or the business goes elsewhere’. So no matter what the Government says the reality is totally different and with so many so-called zombie companies out there, desperate to improve cash flow and survive this economic downturn, even 60 days is an unacceptable timeframe,”
“The European Commission believes that, once introduced by all EU member states, the new rules could mean an extra £150 billion being made available to businesses across Europe, helping to relieve cash flow problems. What nonsense. There are numerous examples of large corporates sitting on huge piles of cash, so that while their cash flow remains solid, the lifeblood of the UK economy – the SME – is being drained away.
Employment specialist 2B Interface www.2binterface.com has been providing companies with fully qualified trades people and professional staff since 2005. Its growing service has been enthusiastically received throughout Europe. And its expanding client base now embraces many specialised trades, industries and professions.