UK: A leading bathroom manufacturer which was added to a ‘hall of shame’ for increasing its payment terms by as much as 60 days has now signed the Prompt Payment Code.
The Forum of Private Business entered Staffordshire-based Bristan in to their online hall of shame after it was given evidence to show their supplier payment times had been increased from 30 days to as much as 90 in 2011. Following negative publicity in the trade press, Bristan has since subscribed to the Institute of Credit Management’s Prompt Payment Code which demands a number of pledges from its signatories.
Primarily these are: to pay suppliers on time within the terms agreed at the outset of the contract, without attempting to change payment terms retrospectively; giving clear guidance to suppliers and ensuring there is a system for dealing with complaints; and encouraging good practice by requesting lead suppliers encourage adoption of the code throughout their own supply chain.
Lance Gillett, Bristan chief financial officer commented: “Bristan Group has always upheld a policy of paying our suppliers on time against our agreed negotiated terms. So, we were happy to join and support the Prompt Payment Code after hearing about it in a letter from the Forum of Private Business."
“We welcome Bristan’s move to join the Prompt Payment Code, which means they have taken seriously the negative publicity their actions prompted in the media,” said the Forum’s senior policy adviser Alex Jackman.
“Prompt payment is critical to the cash flow of every business, and especially to smaller businesses within the supply chain.
“The Prompt Payment Code is about encouraging and promoting best practice between organisations and their suppliers. Signatories to the Code commit to paying their suppliers within clearly defined terms, and commit also to ensuring there is a proper process for dealing with any issues that may arise.”
In relation to this, Lance Gillett concludes: “We are very proud to advise that Bristan Group is rated in the top 1% of businesses in the industry, based on financial strength and low risk, by Dunn & Bradstreet and so can confirm that Bristan is also independently assessed as a strong partner for suppliers and customers to work with”.
But Mr Jackman added: “We are, however, disappointed that Bristan are still paying under the revised terms and conditions and not the original 30- day payment contract many of their suppliers originally enjoyed. It means in some cases that Bristan suppliers could be waiting a quarter of a year to be paid. Most right-thinking people would agree that this is too long at a time when more and more businesses are struggling with cash flow, although we do acknowledge Bristan tell us they will happily talk to any of their suppliers who have issues with this.
“But it is not just the timeliness of payment, though fast payment is always welcome, but rather the certainty of getting paid that is really important, and enables businesses to plan both for their short and longer term futures. Therefore we applaud Bristan for acting on our advice.”
The Forum of Private Business is also now supporting a campaign by Labour MP Debbie Abrahams who is asking all FTSE 100 companies to sign up to the Prompt Payment Code. A letter asking for around 70 which have not yet done so will be sent out shortly asking them to make it a priority.
The Forum’s chief executive, Phil Orford, who has signed the letter, said: “The Prompt Payment Code is something all large firms could and should subscribe to. The Code asks nothing more from responsible businesses than to pay suppliers as and when agreed, without changing payment times retrospectively.
“We know FTSE 100 businesses are 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,” he added.
