The UK’s Intelligent Transport Society, ITS (UK), is issuing a call for all major companies to honour the payment terms with their SME suppliers.
The plea follows comments from a number of ITS (UK)’s smaller members who have described how they have had to wait more than four times the agreed 30 days to receive payments totalling many thousands of pounds. This delay in payment is putting a huge amount of strain on cashflow, which ITS (UK) says at best blocks innovative SMEs from participating in projects with long supply chains and at worst puts businesses at risk of bankruptcy.
The Highways England Fair Payment Charter commits to the organisation paying invoices within 30 days or receipt, and HE expects its contractors to do the same. However, it has emerged some contractors are adding in a number of extra steps which delay payment, including an “Application for Payment” which can take several weeks to process before a “Payment Certificate” is issued. Only then can an SME send an invoice and after that it may face the contractor’s payment terms of up to 60 days.