One of the region’s most experienced business investors is backing the Journal’s Pay Fair campaign as a means of helping firms minimise cashflow problems while securing the resources they need.
Barrie Hensby, chief executive of regional fund management company NEL Fund Managers, said late payments could prevent North East firms from reaching their full potential, with the problem ultimately hitting the health of the wider economy.
Both private and public organisations therefore needed to recognise their responsibilities and deal with supplier obligations promptly, he said.
Over the last two decades, Mr Hensby has overseen investments in hundreds of North East firms, many of which have gone on to become successful both nationally and internationally.
NEL is currently responsible for investing the £23m Finance For Business North East Growth Fund, aimed at companies in the development and growth stage.
So far, it has invested £19m from the fund, which was launched in early 2010, the average investment value sitting around £210,000.
Mr Hensby said: “The investment capital we provide helps businesses put growth plans into action, but the most crucial part of these plans is the new revenues that they generate which will be used to make the expanded operations self-sufficient as quickly as possible.
“Cash very much remains king in the commercial world, and delays in receiving revenues that have been generated can really put the brakes on.
“I’ve seen lots of examples over many years of businesses not being able to move forward as quickly as they might have due to slow payment of money they’ve been owed, which then has a clear impact on the ability to develop new products and services, explore new markets and create new jobs as quickly as they might have otherwise liked.”
Some issues - such as the payment of retentions in the construction industry - were well known, he added.
However, he insisted the problem was not restricted to either the public or private sector, with businesses of all types failing to act ethically and causing commercial problems for their suppliers as a result.
Mr Hensby said: “Technology means that there’s simply no reason why any organisation can’t pay its suppliers quickly and without fuss, and making prompt supplier payments should be part of the standard procedures to which all businesses adhere.”
Through the Pay Fair campaign, The Journal is encouraging North East companies of all sizes to take a responsible and ethical approach to paying firms within their supply chain.
It is asking firms to sign the Business Ethics Pledge created by the North East Institute of Business Ethics, thereby agreeing to join with others to discuss the value of business ethics and to work with each other to transform their working environments for the better.
For more information, see http://www.nibe.org.uk/