LOCAL FIRM URGES SMALL BUSINESSES TO LEARN BIG BUSINESS PAYMENT PROCESSES FOLLOWING PROMPT PAYMENT CODE LAUNCH
Small Business Support Welcomed but Big Businesses Shouldn’t be Scapegoats, says Local Accountant
In the wake of the recent announcement of the Prompt Payment Code, launched by the government to tackle late payment from big businesses, a local accountancy and business adviser firm has urged all small businesses to get a better understanding of large company payment systems, to avoid payment delays and also to aid a better working relationship. Albert Road-based Adams Moore believes that, although a good move to support SME’s, the Prompt Payment Code and the publicity surrounding it could enhance unnecessary negativity towards big businesses, whose payments processes can often be complex and misunderstood by its smaller counterparts.
The code, widely touted as a ‘war on big business’ by Business Minister Michael Fallon MP, is set to target FTSE 350 businesses who must sign up within the month – agreeing to the terms of the code which include paying suppliers on time and within agreed contract terms. While all good and fair, Neil Lancaster, partner at Adams Moore, believes it may support the case for many small businesses to be quick to lay blame at the foot of a larger company for payment delays, rather than commit to getting better educated about payment processes.
He said:“The Prompt Payment Code is certainly valid and will go a long way to helping small businesses struggling at the mercy of larger companies who may be delaying payment. However, I have found it is a common problem that smaller companies either do not understand or appreciate the often complex invoicing systems that make the process more rigid when dealing with the bigger firms.”
Neil, who is also the President of the Tamworth and Lichfield Chamber of Commerce, added:
“Every small company dealing with a larger one has, to some extent, a real opportunity for growth and security and should do everything in their power to nurture and grow the relationship. By finding out about the correct invoicing procedures at the outset – perhaps even by visiting or speaking directly with accounts departments – a lot of the problems can be negated. A common issue is when purchase order or payment reference numbers do not match up, if not referenced it correctly, which can lead to payment delay if it has to be re-submitted. There will always be exceptions and that is why we believe the Prompt Payment Code is valid to support SMEs if they’re struggling to get hold of outstanding payment from big firms sitting on their cash, but I don’t believe large corporates should always be the scapegoat for the problems facing SME’s.”
Adams Moore offers accountancy services for businesses of all sizes, and offers a fixed-fee service, Board Support, to enable businesses to access up-to-the-minute accurate advice and support on tap on a range of business and accountancy issues, and Business Protect, a service designed to help businesses reduce their financial risk in a difficult economic climate by carrying out financial checks on existing and potential customers and key suppliers.