Small firms warned to pay on time

Paying suppliers late is unethical and can seriously damage your reputation, according to a survey conducted by the Better Payments Practice Group (BPPG).


Paying suppliers late is unethical and can seriously damage your reputation, according to a survey conducted by the Better Payments Practice Group (BPPG).

Paying suppliers late is unethical and can seriously damage your reputation, according to a survey conducted by the Better Payments Practice Group (BPPG).

An overwhelming 85% of the 1,652 respondents to the survey conducted on the BPPG website, said that paying suppliers late was an unethical practice.

This highlights the potential damage that not paying suppliers on time can do to a businessÂ’ reputation and credibility, with severe consequences.

The BPPG warns not to underestimate the importance of reputation to a business. A firm with a bad reputation for paying on time is significantly weakened due to deterioration of vital relations with suppliers, which can lead to the loss of a supplier.

Late payment is often seen as a symptom of difficulties within the business, which can cause suppliers to become more cautious and offer less favourable credit terms.

If these arenÂ’t reasons enough to always pay on time, then the BPPG reminds small businesses that late payment weakens the national economy as a whole because it slows up cashflow and restricts growth.

Peter Rowe of the BPPG comments, “Businesses need to remember that prompt payment can be as beneficial to them as it is to their suppliers. The way businesses manage their purchasing and sales relationships can have a direct effect on their profit margins, as a commitment to prompt payment can result in more co-operative partnerships and a better service from suppliers, with more attractive credit terms.”

The BPPG is inviting those businesses with a good payment record to become a signatory to the Better Payment Practice Code, which will enable them to use the BPPG logo as an indication of their commitment to prompt payment. Find out more at www.payontime.co.uk.

(27/8/03)

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