B2B Payments

Only 17 Firms In Scotland Complying With Late Payment Rules, KPMG Finds

U.K. regulations designed to protect small suppliers from late payments by their large corporate customers are in effect, but new analysis from KPMG finds companies aren’t yet on board with the rules.

Reports in The Times on Monday (Jan. 29) said only 17 businesses in Scotland have complied with requirements under the payment practices and performance reporting rules, which require larger companies and LLPs to submit reports every six months on their B2B payment practices. According to KPMG, that leaves nearly 900 corporations in Scotland alone that need to comply with the regulations, and said it would have expected at least double the number of compliant companies at this point.

Alan Flower, a director in KPMG’s regional advisory practice, said the findings could be damaging to small businesses (SMBs).

“We expect both the slow uptake in reporting and these initial results to be of concern to the small business community,” he said, according to the publication.

“Many of our members still report chronic poor payment practice by some of the country’s largest businesses,” said Federation of Small Businesses Head of Devolved Nations Colin Borland in another interview with the publication. He said KPMG’s findings are “disappointing but not surprising.”

The U.K. has made several initiatives to address the issue of late B2B payments, but recent research from Wax Digital, reported by SmallBusiness.co.uk, found that many of the small businesses getting paid late actually don’t pay their own invoices on time either.

Just 27 percent of companies surveyed said they pay their own suppliers on time, and 69 percent said they are habitually late payers.

“While, in some cases, late payments is an unfortunate vicious circle caused by businesses simply not sticking to the terms of their contract, there are many times when it is simply the result of inefficiency,” said Wax Digital Business Development Director Daniel Ball in a statement earlier this month. “Poor invoicing processes don’t just mean delays with money changing hands. They can also mean an end to carefully sourced supplier relationships and reputation, costing the business much more in many different ways. But they are very simple to solve through the adoption of eInvoicing processes.”

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