Bad payment practices have led to failure of many SMEs
The Small businesses and productivity report says that for a small and medium-sized enterprise (SME) to succeed it is crucial they are paid fairly and on time. However, the report finds that bad payment practices have led to the failure of many SMEs and prevented others from growing and improving their productivity. Initiatives to address poor payment practices, including the Government’s Prompt Payment Code, have been ineffective, say MPs.
The report recommends the Government introduce a statutory requirement for companies to pay within 30 days, move as soon as possible to require all medium and large companies to sign the Prompt Payment Code, and equip the Small Business Commissioner with powers to fine those companies who pay late.