Mandate that big corporates pay their suppliers after 30 days maximum

This will free up cash for investment in the suppliers business.

Many large corporates are using smaller businesses to provide a “free loan”. They have extended their payment terms from 30 days to 60 days. This forces the supplier to finance the extra 30 days from reserves or to borrow the money. Both increase our costs and lower profitability.

However, another factor is that by doing this, they deprive the supplier from having access to the money to invest for the future.

The “Late Payment of Commercial Debt Act does not work, because these large Corporates will only do business if you agree to opt out of it.

Therefore, mandated 30 day payment terms with no opt out will give many SME’s access to cash (their own money) for investment which will facilitate growth.

Stephen Davis, StarBase | Mon 9th Dec 2013 at 12:28

1 comment:

How would this be enforced, and enforced any better than the existing Act ? Stopping opt outs is all very well, but taking action when the 30 days has elapsed is another entirely.
Simon Clark, SJC Systems Limited | Fri 10th Jan 2014 at 23:48

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