Small Talk: Corporate Britain just can't be bothered to pay on time

SMEs are often dependent on a few large clients and are reluctant to confront them

So much for corporate responsibility. Just one in four of Britain's largest companies has so far signed up to the Prompt Payments Code, a voluntary code of best practice on payments to suppliers.

This is a serious problem. Small and medium enterprises (SMEs) are owed £35bn in late payments, with all the negative effects on cashflow that has, and three-quarters of the FTSE 100 is effectively refusing to promise to try to do better.

It's not as if the Prompt Payments Code is especially arduous. It doesn't even require signatories to make payments within a set time. Companies can comply with the code simply by paying bills when they said they would, not seeking to change payment terms retrospectively, and by ensuring a clear system is in place to deal with any problems or complaints that do arise.

The Forum for Private Business, one of several groups that last week jointly launched a campaign to persuade many more FTSE 100 companies to sign the code, says Britain's biggest companies are currently sending out the wrong signals. "By subscribing to the code, they will be leading the way as they rightly should for others to follow," says Phil Orford, the FPB's chief executive. "This is their chance to lead by example on what's an extremely important issue for small businesses."

Don't hold your breath. The late payments problem is one that successive governments have struggled to solve, despite new legislation and a series of similar codes of conduct.

The biggest difficulty is that SMEs are often dependent on a small handful of large clients for their very survival and are reluctant to confront these clients, even if they're serial late payers. So while they may be entitled to take legal action against late payers – and to add interest charges and legal fees to their bill – they very rarely do, for fear of losing future business.

Instead, we continue to see growth in the factoring sector, where SMEs sell on their unpaid invoices – at a discount – in order to ease their cashflow problems. And while this niche of the financial services sector certainly meets a need, the fact that need exists is a pretty damning indictment of large businesses that don't pay their bills in a timely fashion.

Is there another option? Well, it would certainly be interesting to see organisations such as the FPB get more proactive – encouraging SMEs to band together to take action against persistent offenders on late payments, for example. While piecemeal, such actions might have a positive effect. There may be still more the Government can do too – a naming and shaming exercise, say, for the worst companies.

Still, the latest initiative on the Prompt Payments Code is also worth supporting – the only explanation for the reluctance of 75 large companies to sign up is that they simply can't be bothered, for there is nothing in the code that any of them would have any problem with in practice. We need to start changing that attitude.

The alternative is that we simply leave the late payments sore to fester. But that would mean more profitable companies going under because of cashflow problems – or at least seeing their potential growth curtailed. Bad for them, bad for the wider economy – and bad for larger companies too in the end.

Ubisense keeps on winning

Ubisense Group, the Cambridge-based technology company, is planning a double celebration today. Not only will it tonight receive a Queen's Award for enterprise, but it is also due to unveil details of a major new client win.

Ubisense makes top-end location monitoring devices – think GPS only much more accurate – to improve the efficiency of supply chain processes. It has an impressive roster of clients in the automotive sector, but will today add South Korea's Hyundai Kia to the list. It is installing Ubisense's system on its assembly lines in the country.

House broker Edison believes the evidence that the business is winning contracts is likely to help drive Ubisense shares, which closed on Friday at 210p, above 249p.

A firm that may improve our world

A warm welcome to Revolymer, which joins the Alternative Investment Market tomorrow, and stands a real chance of improving the world in which we live. It's a British company that has been making technological advances in the polymer sector, working closely with food businesses. It is working on a new type of chewing gum that will be far easier to clean off pavements. That might help local authorities slash the enormous cleaning bills they incur on chewing gum, as well as making our streets more pleasant.

Though still loss-making, the company raised £25m from investors during its IPO, giving it a market capitalisation of £53m.

Small Businessman of the week: Daniel Land, co-founder, Coco di Mama

My business partner Jeremy Sanders and I both had good jobs and we enjoyed what we did, but at the back of our minds, we always knew we wanted to do something else. We share a passion for food and we began talking about how there was a gap in the market for a quick-service restaurant serving Italian food at lunchtime. We started working properly on the business idea in January 2010 but it wasn't until five months later that we resigned from our jobs. That was the scariest day of my life.

"We've been very fortunate with our investors – while we wanted to self-finance as much as possible, we knew we would need additional capital and also that we wanted to be able to draw on other people's experience. The restaurateur Arjun Waney has backed us and so has the former Marks & Spencer boss Sir Stuart Rose, who is now our chairman. Having someone like him to take advice from is just phenomenal.

"We finally opened our first store on Fleet Street in April 2011. It's in a very competitive location, amid lots of other food outlets, but we wanted to test our theory that there was fatigue with the big brands. So far, business has been amazing – exceeding our projections – and we've just opened a second store on the other side of the City.

scienceExcitement from alien hunters at 'evidence' of extraterrestrial life
Life and Style
Customers can get their caffeine fix on the move
food + drink
David Moyes gets soaked
sport Moyes becomes latest manager to take part in the ALS challenge
Life and Style
techCould new invention save millions in healthcare bills?
peopleEnglishman managed quintessential Hollywood restaurant Chasen's
Life and Style
food + drinkHarrods launches gourmet food qualification for staff
Mosul dam was retaken with the help of the US
voicesRobert Fisk: Barack Obama is following the jihadists’ script
Arts and Entertainment
Michael Flatley prepares to bid farewell to the West End stage
danceMichael Flatley hits West End for last time alongside Team GB World champion Alice Upcott
Members and supporters of the lesbian, gay, bisexual, transgender (LGBT) community walk with a rainbow flag during a rally in July
ebooksAn evocation of the conflict through the eyes of those who lived through it
Life and Style
Black Ivory Coffee is made using beans plucked from elephants' waste after ingested by the animals
food + drinkFirm says it has created the "rarest" coffee in the world
Arts and Entertainment
Loaded weapon: drugs have surprise side effects for Scarlett Johansson in Luc Besson’s ‘Lucy’
filmReview: Lucy, Luc Besson's complex thriller
Arts and Entertainment
Jamie T plays live in 2007 before going on hiatus from 2010
arts + entsSinger-songwriter will perform on the Festival Republic Stage
Life and Style
food + drinkThese simple recipes will have you refreshed within minutes
Jermain Defoe got loads of custard
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Business Analyst - Banking - London - £550 - £650

£550 - £650 per day: Orgtel: Business Analyst - Traded Credit Risk - Investmen...

Data Centre Engineer - Linux, Redhat, Solaris, SAN, Puppet

£55000 per annum: Harrington Starr: A financial software vendor at the forefro...

.NET Developer

£600 per day: Harrington Starr: .NET Developer C#, WPF,BLL, MSMQ, SQL, GIT, SQ...

Data Centre Engineer - Linux / Redhat / Solaris / Puppet / SAN

£65000 per annum: Harrington Starr: A financial software vendor at the forefro...

Day In a Page

Air strikes? Talk of God? Obama is following the jihadists’ script

Air strikes? Talk of God? Obama is following the jihadists’ script

The President came the nearest he has come yet to rivalling George W Bush’s gormless reaction to 9/11 , says Robert Fisk
Ebola outbreak: Billy Graham’s son declares righteous war on the virus

Billy Graham’s son declares righteous war on Ebola

A Christian charity’s efforts to save missionaries trapped in Africa by the crisis have been justifiably praised. But doubts remain about its evangelical motives
Jeremy Clarkson 'does not see a problem' with his racist language on Top Gear, says BBC

Not even Jeremy Clarkson is bigger than the BBC, says TV boss

Corporation’s head of television confirms ‘Top Gear’ host was warned about racist language
Nick Clegg the movie: Channel 4 to air Coalition drama showing Lib Dem leader's rise

Nick Clegg the movie

Channel 4 to air Coalition drama showing Lib Dem leader's rise
Philip Larkin: Misogynist, racist, miserable? Or caring, playful man who lived for others?

Philip Larkin: What will survive of him?

Larkin's reputation has taken a knocking. But a new book by James Booth argues that the poet was affectionate, witty, entertaining and kind, as hitherto unseen letters, sketches and 'selfies' reveal
Madame Tussauds has shown off its Beyoncé waxwork in Regent's Park - but why is the tourist attraction still pulling in the crowds?

Waxing lyrical

Madame Tussauds has shown off its Beyoncé waxwork in Regent's Park - but why is the tourist attraction still pulling in the crowds?
Texas forensic astronomer finally pinpoints the exact birth of impressionism

Revealed (to the minute)

The precise time when impressionism was born
From slow-roasted to sugar-cured: how to make the most of the British tomato season

Make the most of British tomatoes

The British crop is at its tastiest and most abundant. Sudi Pigott shares her favourite recipes
10 best men's skincare products

Face it: 10 best men's skincare products

Oscar Quine cleanses, tones and moisturises to find skin-savers blokes will be proud to display on the bathroom shelf
Malky Mackay allegations: Malky Mackay, Iain Moody and another grim day for English football

Mackay, Moody and another grim day for English football

The latest shocking claims do nothing to dispel the image that some in the game on these shores exist in a time warp, laments Sam Wallace
La Liga analysis: Will Barcelona's hopes go out of the window?

Will Barcelona's hopes go out of the window?

Pete Jenson starts his preview of the Spanish season, which begins on Saturday, by explaining how Fifa’s transfer ban will affect the Catalans
Middle East crisis: We know all too much about the cruelty of Isis – but all too little about who they are

We know all too much about the cruelty of Isis – but all too little about who they are

Now Obama has seen the next US reporter to be threatened with beheading, will he blink, asks Robert Fisk
Neanderthals lived alongside humans for centuries, latest study shows

Final resting place of our Neanderthal neighbours revealed

Bones dated to 40,000 years ago show species may have died out in Belgium species co-existed
Scottish independence: The new Scots who hold fate of the UK in their hands

The new Scots who hold fate of the UK in their hands

Scotland’s immigrants are as passionate about the future of their adopted nation as anyone else
Britain's ugliest buildings: Which monstrosities should be nominated for the Dead Prize?

Blight club: Britain's ugliest buildings

Following the architect Cameron Sinclair's introduction of the Dead Prize, an award for ugly buildings, John Rentoul reflects on some of the biggest blots on the UK landscape