Freelancers being paid even later

18% of the respondents said late payment and alterations to the terms and conditions governing payments had deteriorated and an average 36% of turnover at any one time is tied up in late payments. 37% of late payers are taking between 30 and 90 days to settle invoices. Over £30 billion is currently outstanding to SMEs in the UK according to BACS.

Large companies are the main offenders and the latest one to join the FPB's late payment Hall of Shame is Dell. The IT firm has recently standardised its settlement terms from 50 days to 65 days; a move they blame on the current economic climate. Other firms on the shame list include Argos, Boots, Carlsberg and United Biscuits.

Dell said the change would affect non-production procurement suppliers such as Telecoms, insurance, financial services and services vendors. It will not apply to some of their exempted diverse suppliers, including certified small vendors, who can have shorter terms of between 20 and 45 days.

Phil McCabe, from the FPB, said that SMEs and limited company contractors are still suffering from late payers and this devastates cashflow and can force companies into administration. Large enterprises have a duty to settle promptly and by failing to do so they jeopardise the entire supply chain.

The Late Payment of Commercial Debts Act 1998 states that small firms have a Statutory Right to Interest. This means they can charge interest on overdue debts. However, most SMEs do not take advantage of this due to fears that the large companies will stop trading with them entirely.

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