Businesses urged to 'pay fair'

BUSINESSES as well as public sector organisations are being urged to sign up to the Government's Prompt Payment Code which commits them to paying their suppliers on time.

Deborah Cadman, chief executive of the East of England Development Agency (EEDA), is writing to local councils, health bodies and other public sector organisations which have yet to sign up in a bid to secure their commitment to the code.

However, with as many as 25% of business failures being blamed on late payments - whether by public or private sector customers - Ms Cadman also urging business groups to support the initiative.

“As business-focussed organisations, regional development agencies like EEDA recognise the importance of prompt payment,” she said. “In fact, we were amongst the first agencies to sign-up to the Government's 10 day payment pledge last year, and we're right behind this new code.

“The costs to business of late payments is quite staggering, with one in four companies going insolvent as a result of their invoices not being paid on time. UK firms also paid over �180 million in unnecessary interest charges. It is clear, if we all commit to paying on time, we can help each other through these tougher times.”

Regional business minister Rosie Winterton added: “Prompt payment remains the biggest financial challenge faced by firms and was responsible for a staggering 4,000 UK companies going bust last year.

“It is critical that Government takes the lead and together with local businesses creates a better payment culture. That's why in July, central government departments paid �17 billion worth of invoices within 10 days. I want to see more companies paying fair and signing up to the Prompt Payment Code.”

n To sign up to the Prompt Payment Code visit www.promptpaymentcode.co.uk. For advice on improving your cash flow, financial planning and debt recovery, visit the Business Link website, www.businesslink.gov.uk/east.