North East businesses interested in tackling the blight of late payments are being invited to a free event at which the issue is to be discussed.
According to the CBI, firms across the UK are owed £30bn as a result of the increasingly high profile problem, many of them small and medium-sized suppliers owed money for work with larger companies and even public bodies.
The issue is among those being looked at by the North East Institute of Business Ethics (NIBE), an initiative set up last year to promote a responsible business culture within the region.
The independent body has now received support from Newcastle University Business School, which has helped set up a new website will be promoting events on its behalf.
Tomorrow the business school, working with NIBE, will host an event to highlight the virtues of prompt payment and an ethical approach to business in general.
Speakers will include Journal editor Brian Aitken, Professor David Campbell from the university and the business school’s director John Wilson.
“Newcastle University Business School is very well connected with small and medium-sized businesses in the North East,” Mr Wilson said. “Currently, the issue of prompt payment is highly topical and indeed crucial to the short-term and long-term survival of those businesses.
“We want to get the message across that we have a responsibility to take am ethical and sustainable approach.”
He pointed out that when small businesses had wages, raw materials and distribution costs to consider, liquidity was a major issue.
“Payment delays can mean increased debt and increased interest payments that can detract from the profit that SMEs rely on,” he said. “It can create a progressive cycle that can move a business towards bankruptcy.”
He added that while protective legal frameworks were in place, the associated costs of pursuing payments can be prohibitive for smaller firms. It was not so much a change in the law that was required, therefore, but a cultural shift and change in attitudes.
Bridge Club director Caroline Theobald, who co-chairs NIBE alongside Canon Glyn Evans said: “When we launched last year, people from all sorts of businesses, as well as politicians, said this was the one issue that they really wanted to do something about.
“We were always clear we didn’t want it to be a talking shop - that we were listening to people’s views - and so we want to move forward with this.
“We’re really trying to do something that makes a difference as far as business and the community are concerned as well as helping people to see how businesses are wealth creators that, if run properly, can be a force for good.”
She added that an ethical approach can bring about great benefits for businesses.
“If businesses pay promptly, for example, then when times are tough, suppliers will tend to continue to deal with them,” she said. “This isn’t about saying that big businesses are bad and small businesses are good.
“Good business is good business and we want to stress the positives - good business practice benefits everyone.”
Tomorrow’s event will begin at 4.30pm
Anyone wishing to attend should register by contacting Ms Theobald on 07976 414643.