FPB want tighter control on late payment

The Chief Executive of the Forum of Private Business (FPB), Nick Goulding, is calling for tighter control on poor payment practices in a speech to the Association of Credit Professionals.

The FPB is calling on the Government to do more to help small firms understand their rights on late payment. Under the Late Payment of Commercial Debts (Interest) Act firms are entitled to a Statutory Right to Interest (SRI) at 8% above the base rate for late payment of commercial debt. However, under current legislation, applying SRI is optional, something that the FPB would like reviewed.

“The European Late Payment Directive is currently under review, and the FPB would like issues such as the mandatory imposition of the Statutory Right to Interest looked into.” said Mr Goulding.

“This would remove the fear of small firms imposing interest on late paying customers and whilst we recognise some small firms are also slow to pay, quite often that is because they are passing delays in cash flow on to their suppliers.” he added.

The FPB is also calling on the Government to give more power to the Better Payment Practice Group (BPPG). The BPPG is a cooperative forum of representatives of the business community, banks and payment systems professionals. It was established to help improve the payment culture amongst organisations trading in the UK. Mr Goulding said that the BPPG should be an excellent vehicle for change but that it lacks influence.

“The Better Payment Practice Group has been left in limbo after the responsibility for administering it was reviewed by the Department of Trade and Industry without consulting the members of the group. As a result the Better Payment Practice Group’s future remains uncertain and its role has been undermined.”