Posted: Thu 2nd Apr 2020
Enterprise Nation has backed a call by the Small Business Commissioner for big businesses to pay their suppliers on time during the coronavirus outbreak.
Philip King, who helps businesses facing payment issues, said he has written to companies "displaying the worst examples of payment practice by issuing standard communications to their entire supplier base advising that payments are going to be delayed or stopped".
King added that such actions could "damage the supply chain, the economy and the reputation of their own business".
The Commissioner has also thanked companies that have committed to paying their suppliers on time or earlier than originally agreed.
Last month supermarket chain Morrisons said it would pay suppliers immediately. Fellow retailer Aldi has also said it will reduce payment terms so more than 1,000 suppliers with a turnover of less than £1m will be paid immediately.
The impact of late payments on small businesses
King said: "This is a time for collaborating with business partners rather than confronting them. Tough decisions will of course, need to be made but they should be in a spirit of communication and cooperation.
"A delayed payment to a small or micro business will help ease the pressure on your cashflow but for the business owner not receiving a relatively small payment, it may be the difference between putting food on the table or not.
"It can also have a huge impact on well-being and mental health. I ask you to consider the human impact of your actions rather than seeing them simply as transactions.
"My plea to you as a business leader is to prioritise your small suppliers and pay them as normal but, at the very least, I urge you to ensure individual conversations take place with them, so the impact of your actions is fully understood. Decisions taken in that spirit will allow for exceptions to be made and the worst consequences to be avoided."
Enterprise Nation founder Emma Jones has backed the call.
She said: "If all businesses took this approach to switch off or delay all payments without understanding the impact it might have on the individual businesses in their supply chain, it would be incredibly dangerous for us all - and for the small business community in particular.
"At the moment we're in a position where financial support is in place, but it's not there yet and may not be for some time. Every business and every individual must play their part and act responsibly if we are going to get through this in the best shape possible."
The Federation of Small Businesses and Forum of Private Businesses have also supported the Small Business Commissioner's appeal.
The latest coronavirus support information
We are keeping you updated on the latest information on how to access the government's coronavirus business support here. You can also find advice and ask a question on Enterprise Nation's coronavirus business advice hub. Follow Enterprise Nation on Twitter too for updates.