Banks amongst slowest payers
Crucial for large business to pay suppliers quicker
TSB has called on its high street bank rivals Co-Operative Bank and Metro Bank to speed up supplier payments after it found the banks are among the worst culprits for paying small firms late.
Co-Op bank pays just half its suppliers within 30 days, while Metro Bank topped the list of overdue invoices at more than one in four, according to TSB’s data.
The figures put both Co-Op and Metro Bank below the voluntary standard ‘prompt payment code’. The prompt payment code requires signatories to pay 95 per cent of invoices to companies with fewer than 50 staff within 30 days, and 95 per cent of all invoices within 60 days.
Late supplier payments by big firms in not just the banking industry, but in all industries including construction, have come under scrutiny during the pandemic as late payments have forced small businesses into financial difficulty.
The government’s Small Business Commissioner Liz Barclay warned earlier this year that the UK was facing the loss of 440,000 small firms this year as a result of poor payment practices, as well as “the talent that could drive future prosperity”.
Said Liz Barclay: “If they don’t get paid quickly, they can’t manage their cashflow and may well not be around the next time you need them. And it can be very expensive in time and money to find a replacement supplier you can trust,” Barclay warned.
TSB’s Director of Customer Banking, Mark Curran called on banks to put “minds to task” to resolve the issues.
“Paying business suppliers on time is critical not only to healthy cash flows and working capital but also reducing the mental burden on owners so they can focus on what matters most to grow their business,” he said.
