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Top 100 FTSE companies urged to sign prompt payment code
Some of the UK's largest and most successful businesses are being asked to agree on paying their smaller suppliers on time.
The Forum of Private Business (FPB) is asking firms to pay suppliers as laid-out in the terms and conditions set out at the start of their contracts, and without changing payment times later on.
It forms part of the wider 'Be Fair - Pay on Time' campaign spearheaded by Oldham East and Saddleworth MP Debbie Abrahams to highlight how much of a problem late payment is for small businesses.
She said in some cases SMEs were waiting in excess of 90 days for payments from larger businesses.
Shadow business secretary Chuka Umunna launched the challenge for the FTSE companies to pay their accounts on time in order to help SMEs stay afloat as the county recovers from recession.
Only a quarter of the FTSE 100 companies have currently signed up to the voluntary Prompt Payment Code (PPC).
The FPB's CEO Phil Orford said: "The Prompt Payment Code is something all large firms could and should subscribe to. It asks nothing more from responsible businesses than to pay suppliers as and when agreed, without changing terms and conditions retrospectively."
"FTSE 100 businesses are the true bastions of the UK's private sector and, by subscribing to the Code, they will be leading the way as they rightly should for others to follow. This is their chance to lead by example on what's an extremely important issue for small businesses."
Chuka Umunna added: "Too many small companies are waiting too long for payments, and many successful firms are being put at risk of going under because they are not being paid on time by large companies, organisations and the public sector."
According to Umunna, SMEs are owed billions of pounds in late payments. The problem is widespread in both public and private sector contracts.
Last year the Government pledged to pay 80 per cent of its invoices within five days, but faces increasing pressure to 'name and shame' public-sector contractors who are delaying payments to smaller suppliers.
According to research from law firm EMW, 11 of the largest public-sector contractors are failing to pay their suppliers, often small businesses, within a 30-day limit.
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