Dell enters into Late Payment 'Hall of Shame'

Dell has been named and shamed as a laggardly debt settler after the Forum of Private Business entered it into its Late Payment ‘Hall of Shame’.

Following the computer vendor’s decision to extend the time it takes to pay suppliers by 15 days. According to the Forum the leading computer vendor wrote to suppliers that it is ‘standardising’ its payment terms from 50 to 65 days from 10 July, citing ‘current economic conditions’ as the reason for the change.

The Forum has written to Dell informing it that the company is being added to its Hall of Shame, joining other UK slow payers like Argos, United Biscuits, Diageo, InBev, Carlsberg UK, Tetrosyl, Rok, and Northgate Information Solutions. The Late Payment Hall of Shame is part of the Forum’s lobbying to tackle the UK’s culture of poor payment, and is delivered by the organisation’s Communications Director business support solution.

Dell has now been invited to sign up to the Government’s Prompt Payment Code, where signatories pledge to pay suppliers on time, give them clear guidance and encourage good practice throughout the supply chain.

Late payment can cause serious cash flow problems for firms. According to the Forum’s latest Economy Watch survey, 18 per cent of small firms respondents reported the problem of late payment, and changes to payment terms and conditions, has become worse. On average, at any one time, 36 per cent of respondents’ turnover is tied-up in late pending payment.

Further research carried out by the Forum recently shows that 37 per cent of late payers take between one-and-three months to pay invoices and, according to Bacs, more than £30bn in outstanding payments is owed to the UK’s small firms at present.

“Companies like Dell have a responsibility to pay promptly – failure to do so can mean the whole supply chain seizes up,” said Forum of Private Business spokesman Phil McCabe. “For the sake of small businesses and the economy the Coalition Government must prioritise tackling the culture of poor payment, addressing the ‘bully boy’ behaviour of these bigger companies.

Under the Late Payment of Commercial Debts Act 1998, small businesses have a Statutory Right to Interest, meaning they can in theory charge interest on late payments. However, claims McCabe, few take advantage of this or are prepared to speak out publicly out of fears that large companies will take their business elsewhere.

“Many larger companies take advantage of this culture of silence by imposing changes on their smaller suppliers’ terms and conditions, often mid-contract and with little warning, effectively sidestepping the redress provided by the late payment legislation,” McCabe adds.

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