The Better Payment Practice Group finds that size doesn't matter
A survey by the Better Payment Practice Group (BPPG) has revealed that nearly 40% of respondents think that small companies are worse payers than large companies. This challenges the perceived wisdom that it is just large firms that pay late.

The research, which was conducted on this website asked businesses which are the worst payers: large companies (with over 50 employees), or small companies (with 50 or fewer employees)? Of the 460 respondents, nearly 40% chose small companies.

Previous research within the last year by the BPPG has also found that:

• 63% of businesses never check the creditworthiness of their customers before dealing with them.
• 25% of firms do not confirm their terms of trade in writing.

The BPPG urges businesses to do more in 2005 to help combat late payment, such as:

• Always check the creditworthiness of potential customers before trading with them;
• Agree terms of trade before you start trading and confirm them in writing;
• Find out who is responsible for payment of your invoice, and establish a rapport with them.  Make sure that they have all the information that they need in order to pay you on time;
• Undertake a systematic collections procedure.

Peter Rowe, BPPG member and Director General of the Institute of Credit Management, commented: “The research shows that if a company believes it is acceptable to abuse trade credit it will, regardless of its size. Late payment can put severe strain on the cashflow of companies and limits their ability to fund growth. The flow of cash in the economy should cascade, not trickle, down the chain of suppliers. The poll should act as a reminder that strong credit management is vital, regardless of the size of company you are dealing with.“

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