Paying promptly and adopting an ethical stance forms a key part of the economic recovery - that is the view of Hodgson Sayers, the latest North East business to sign up to The Journal’s Pay Fair campaign.
Through the Pay Fair campaign, The Journal is encouraging companies across the region to take a responsible and ethical approach to paying firms within their supply chain.
With a direct workforce of 100 and many more in sub contractors, Stanley-based Hodgson Sayers knows only too well how important prompt payment is – and that the success of the construction industry hinges upon all firms following the Prompt Payment Code and keeping to agreed payment terms.
Mike Wade, finance manager at the business said: “We definitely support the Pay Fair campaign.
“As a poor accountant I was always told to worry about three words – revenue, profit and cash – but from an ethical point of view I find three others words key to business: honesty, decency and integrity.
“In fact, revenue, profit and cash might be argued as the result of honesty, decency and integrity. They help you to win work and keep work, recruit staff and to retain staff – and those are key to the construction industry.
“All of those things are what we feel are right for the business world. It’s a key part of recovery. That includes treating your suppliers with decency and being honest with payments.”
Mr Wade said firms must adopt and stick to those three words if they are to build and maintain strong relationship – and also to maintain payment terms once a contract has been entered into.
“In construction planning is key and if you can rely upon your clients to pay you on time it helps everyone to plan. There are no surprises,” he said. “If there is a problem you can go to your bank, shareholders or whoever your source of cash is, and say ‘I know I’m going to get this money on time’.
“In our business we have a large number of materials we have to pay for, a large number of sub contractors to pay and we pay our employees weekly, so we are paying and planning upfront, so that makes it key to rely on clients.
“My wage bill every week is £25,000, and that keeps my guys in work. It’s key to pay that, but we also have to pay suppliers on time to make sure they can do the same.
“The speed at which money changes hands is key and in 2007 that ability was cut which slowed down the whole money system. Everything came to a juddering halt.”
Creating and maintaining relationships forms a vital part of the code according to Mr Wade, and that includes speaking up at the first inkling that there may be a financial difficulty looming on the horizon.
“We’re all the same – we’ve all had times when it’s easier not to do the hard things,” he said.
“But in the case of business you must do it.
“If you have been let down or cannot fulfil your commitments, don’t sit on your hands. Speak to the people it will affect.”
He added: “Many moons ago I was told that you work for people, you buy from people and you work with people, so keep relationships strong with those you work with who you trust.
“The more we can keep that message going the better – and to have campaigns like yours is essential.
The Journal’s Pay Fair campaign now has a rising number of North East businesses showing their support for its aims.
The campaign calls upon 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.
We are 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.