Round & Round We Go

Some days ago now, I received an e-mail from Stephen Cowan, who is a Managing Partner at Yuill & Kyle, debt recovery lawyers based in Scotland. It relayed a press release dated 6th Feb 2012 from the Department for Business, Innovation and Skills. The e-mail was headed 'Government and Business Press for Prompt Payment - and I knew exactly what the Press Release was going to say before I read it.

Once again, Government and industry is calling on businesses and public organisations to pay suppliers on time and for small firms to pursue those who put them at risk by delaying - and once again the same organisations and the same people are supporting this cause:

The Forum of Private Business, a not-for-profit organisation that offers advice and help to SMEs in the UK - much of which is free on-line via articles. Membership of the FPB has never been an expensive proposition, and the Forum is now offering an introductory membership to provide SMEs with a basic business support package free of charge.

The Institute of Credit Management which publishes various useful guides and runs the Prompt Payment Code, which promotes best practice between organisations and their suppliers. Businesses and organisations that sign up to the Code commit to paying their suppliers within clearly defined terms, and also commit to ensuring there is a proper process for dealing with any issues that may arise.

The Association of Chartered Certified Accountants (ACCA) which has recently published a new guide on prompt payment.

I have known of these organisations and many of the people who work with them and promote them for many years. I appreciate and admire both the organisations and the people, and I would advise any SME to take what is on offer from any one or all them, because what is on offer is well worth having - particularly as some of it is going to cost nothing. What troubles me about this new initiative is that it is the mixture as before which, like all the previous mixtures, fails to address the real problem.

The real problem is fear. Fear of being delisted by a powerful customer for failing to agree to its terms. Fear of the result of using existing legislation to make a complaint about a powerful customers' failure to pay according to terms. That fear is based in self-interest and a desire to survive, and I fear that no amount of education, no inducement, nor any legislation will ever succeed in overriding it.