Dell named and shamed as late payer
Computer colossus Dell has been added to the Late Payment Hall of Shame by the Forum of Private Business after extending its supplier payment time by 15 days.
The IT company wrote to its suppliers to inform them that from 10 July payment terms would be extended from 50 days to 65 days, with ‘economic conditions’ cited as its reasoning.
The Late Payment Hall of Shame is the Forum of Private Business’s lobbying vehicle, and aims to tackle the UK’s culture of poor payment. Household names such as Argos, United Biscuits and Carlsberg have all been previously identified as poor payers by the Forum.
The Forum is encouraging Dell to sign up to the government’s Prompt Payment Code, where signatories pledge to pay suppliers on time, giving clear guidance and encouraging good practice throughout the supply chain.
The latest Economy Watch survey by the Forum identified late payment as being a major contributor to small firms’ cash flow problems, with 18% of small firms commenting that the problem of late payment and changes to payment terms and conditions has become worse. It also found that, on average, 36% of respondents’ turnover is tied up in late payment at any one time.
37% of late payers take between one and three months to pay invoices and more than £30billion in outstanding payments is currently owed to small firms in the UK.
Phil McCabe from the Forum of Private Business commented: “Small businesses continue to suffer from the blight of late payment, which devastates cash flow and forces firms into administration. Companies like Dell have a responsibility to pay promptly – failure to do so can mean the whole supply chain seizes up.”
“When they receive a letter like this, smaller suppliers have no choice but to agree and stay silent. There is little room for bargaining. For the sake of small businesses and the economy the new Government must prioritise tackling the culture of poor payment, addressing the bully boy behaviour of these bigger companies.