Water company is quick to pay bills
Nov 27 2007 by Peter McCusker, The Journal
NORTHUMBRIAN Water settles it own bills more quickly than any other North-East’s FTSE listed company – taking on average just 19 days to pay its suppliers.
The Durham company’s figure compares to the average of 27 days for FTSE-250 companies in new research launched by the Federation of Small Business.
And small businesses are being urged to use a website to check on the payment punctuality of companies they supply.
The Federation of Small Business (FSB) and Leeds University’s Business School launched the Private Sector Payment Performance League Tables last year. The website is updated regularly and today it shows that one Middlesex company takes 344 days to pay its invoices.
The FSB is urging North-East businesses to use the website as a vital tool in managing their affairs. A spokesman said: “Late payment of invoices is a complex issue but in simple terms an invoice that is not paid on time can spell the end for a small business. There can be no excuse for paying invoices several hundred days late.
“These league tables show that some firms are failing miserably to honour their obligations and are using their size to get away with it.
“Other firms do not comply with the legal requirements and do not report their payment times at all.
“Small firms will be interested in using these tables before entering into contracts to supply large firms with goods and services. They are an excellent source of information.
“We hope that the large firms who have been identified as poor payers will raise their game to a much higher level while we also congratulate those identified as good payers.”
A spokesman for Northumbrian Water said: “We recognise how important it is to pay small businesses on time and that is what we endeavour to do.”
The FSB has also reminded small businesses it can levy interest on payments which are overdue. The website uses information on payment times which have to be published by law in a company’s accounts.
Colin Stratton, FSB North-East regional chairman said: “While the Late Payment of Commercial Debts (Interest) Act 1998 exists to protect businesses from late payment on goods and services, our members can often be reluctant to take this next step for a variety of reasons.
“This is because the large firm will inevitably not renew the contract and go elsewhere.
“In many cases a small business depends on one large contract for its future and so it will not risk this despite the fact that late payment can also threaten the firm’s viability.”
