Late payment could damage your reputation
For the second year in a row, research conducted by the Better Payment Practice Group (BPPG) has revealed that more than 80% of UK companies believe that late payment is unethical.

The survey, conducted on this website, asked businesses whether they thought paying suppliers late was an unethical practice. Of the 933 businesses that responded, 767 believed this to be the case. This corresponds with the attitude of businesses in August 2003, when four out of five website visitors answered yes to the same question.

As well as being ethically wrong, the BPPG is reminding businesses that the practice of deliberately paying later than agreed terms can prove detrimental for sound economic reasons:

• A late paying business is weakened because it develops a bad reputation;
• Relations with suppliers can be damaged by late payment and may ultimately lead to the loss of a valued supplier;
• Late payment is often taken as an indication that a business is in difficulties - if this impression is created, a supplier may offer less attractive credit terms;
• Late payment weakens the economy as a whole because it constricts growth.

Peter Rowe, BPPG member and Director General of the Institute of Credit Management commented: “The BPPG believes that the way a business manages its purchasing and sales relationships has a real impact on profit margins. A commitment by businesses to paying on time can be a powerful aid to better buying, by producing closer, more co-operative partnerships between firms and their suppliers, leading to superior service and more attractive credit terms.”

He added: “If the UK’s payment culture is to continue improving, it is crucial that firms understand the commercial and ethical benefits prompt payment brings to them as well as their suppliers. Paying on agreed terms injects more money into UK industry; keeps existing suppliers healthy; encourages new firms to compete in the supply arena; allows buyers to benefit from a wider range of supply sources and helps the UK economy to become more competitive in the world market.”

Businesses which have a prompt payment record are invited to become a signatory to the Better Payment Practice Code, enabling them to use the BPPG’s logo as a declaration of their commitment to paying suppliers on time. Businesses can sign up to the code by clicking here. This site also includes a range of information, tools and advice to help businesses reduce the incidence of late payment on commercial debt.

You can keep up to date with the Better Payment Practice Campaign by sending us an email