Supermarkets failing to pay suppliers on time
Tracy Ewen, managing director of IGF Invoice Finance, comments on research from Experian revealing that supermarkets are taking more than a month longer than agreed terms to settle debts with suppliers
“The payment terms that many suppliers in the UK are subject to are not fit for purpose - with supermarkets in particular the worst offenders in taking too long to pay their suppliers. Clearly, for many small businesses this isn’t a sustainable practice, yet it is a reality that they have very little power to change. The intense cashflow pressures that these firms face should be enough to push the government to adopt the stronger regulatory stance set out in Sajid Javid’s Enterprise Bill, which seeks to stop such abuses of power by some of the UK’s larger companies.
If nothing changes, we may see small companies fold unnecessarily. The macroeconomic impact of this could have damaging repercussions for the economy as a whole. For those firms mired in long payment terms, there are options available that cover the gap between work completed and money in the bank. It’s therefore important for firms to thoroughly review their options and make use of any free financial advice that their own financial partners and suppliers can offer before pressure from large customers impacts their growth or operations.”