One of the leading figures in North East business support has backed The Journal’s Pay Fair campaign as a way to “re-calibrate” the way companies work together.
Lucy Armstrong, chief executive of business support group The Alchemists, says getting firms to meet their agreed payment terms would be benefitical to all.
Ms Armstrong, who is also chair of Capital for Enterprise, the body responsible for over £4bn of Government-backed debt and equity support for UK businesses, was last month at the launch of the Journal’s Pay Fair campaign, which is calling on companies to pay their bills on time, rather than holding onto money to boost their own cash flow.
The campaign is working with the North East Institute of Business Ethics, of which Ms Armstrong is a founding member.
Ms Armstrong said: “There’s no problem negotiating and agreeing terms for when you will pay. It’s not about saying: ‘You must pay on day X’. It’s about having an agreed process so everyone knows when they will get paid.
“Late payment is a very bad habit that all aspects of British business have got into. This is an opportunity for the North East to re-calibrate that was of doing business and change it for the better.”
According to the CBI, £30bn is owed to UK firms, many of them SMEs that have carried out work or supplied products to larger companies or public bodies.
In extreme cases, the pressure placed on such businesses’ finances can be so extreme it can force the firms into bankruptcy. A ‘trickle down’ effect can also occur in which the smaller businesses can, in turn, struggle to pay their own suppliers.
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/