Major business bodies have this week launched a new supply chain guide in an attempt to address the worsening late payment crisis.
The Federation of Small Businesses (FSB) and British Services Association (BSA) said the guide will “highlight challenges faced by smaller firms” and “identify routes to collaborative working”.
Recent research revealed that small businesses were owed more than £23 billion in outstanding invoices in 2020, while late payments were directly attributed to the collapse of some 50,000 small businesses every year.
The BSA said the new guide, found here, will help the smallest and largest organisations come together to benefit from a “healthy and more diverse supply chain” through “partnership working”.
It also highlights the significance of the Prompt Payment Code, aligning objectives, social values, and building relationships.
“Everyone needs to contribute in full if the UK is to recover quickly, sustainably and equitably,” said Mark Fox, Chief Executive of the BSA.
“That means the public sector, and private sector and VCSE organisations large and small, together in harness, working towards the same common goals.
“This Statement sets out some examples of what has been achieved. But we are all on a journey, and we recognise that much more needs to be done. We hope this Statement will highlight examples which all larger businesses can learn from and adopt.”
Welcoming the guide, Small Business Minister Paul Scully added: “This welcome statement from the BSA highlights the importance of businesses working together and paying their partners on time, and builds on the government’s work with the Small Business Commissioner to tackle the toxic issue of late payments.”
Earlier this year, it was revealed that the Prompt Payment Code payment period would be slashed in half, from 60 to 30 days, to protect small businesses.
For help and advice with related matters, please get in touch with our expert team today.