Some 69 per cent of business owners and finance directors questioned in Hilton-Baird Collection Services’ annual Late Payment Survey believe Fallon is doing the right thing in threatening to disclose the names of those ignoring repeated requests to join the code.

The support comes after their businesses had to wait an average of 21 days beyond agreed credit terms to be paid by customers during 2012, according to the research conducted by the debt collection agency. 

This represents an increase of four days from 2011 and highlights the escalating problems businesses are facing with regards to getting paid on time.

Thirteen per cent of businesses say they were forced to write off more than 5 per cent of their turnover over the past 12 months, with 38 per cent classifying over 10 per cent of their debtor books as more than 90 days old.

See also: How to deal with late payment

Managing director of Hilton-Baird Collection Services, Alex Hilton-Baird, comments, ‘Businesses are firmly behind Michael Fallon’s attempts to encourage the country’s largest firms to improve their payment performance. Whether this will have any effect remains to be seen, however, as it isn’t just large corporates that are culpable. Late payment is occurring right the way through the supply chain.

‘These numbers are simply unmanageable for the vast majority of businesses, particularly when you take into consideration the range of other pressures on their cash flows at present. In many cases businesses are having to wait more than 60 days, sometimes more, to be paid after providing goods or services. Given this, it is obvious why the economy is caught in a state of flux.

‘It is absolutely essential that businesses of all sizes use the most appropriate credit management strategies in the coming months to safeguard their cash flows against this critical problem.’