FSB: Small businesses exploited

Many small businesses are being exploited by their larger counterparts during the economic crisis, the Federation of Small Businesses (FSB) remarks.

According to the federation, large companies are taking advantage of smaller firms by imposing new terms and fees on owners as well as delaying invoice payments.

For example, large organisations are sometimes forcing smaller firms to wait for more than 100 days before making their payments and modifying contracts with little notification.

The FSB also reports that while legislation is in place which would enable owners to charge interest on payments owed by bigger companies, they are fearful to use this, in case of losing their custom.

FSB national chairman John Wright says larger firms are ‘abusing their power’ in a ‘shocking’ manner.

‘Making small businesses wait 105 days for payment and charging them for the privilege of doing so is nothing short of outrageous,’ Wright comments.

Under the Late Payments of Commercial Debts Act, small businesses are able to charge interest at up to eight per cent on late payments.

See also: 4 ways to protect your small business against late payments

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Late Payment