By Claire West
Responding to the Marks & Spencer Group’s decision to extend payment terms for suppliers from 60 to 75 days, Federation of Small Businesses National Chairman John Allan said:
“Marks & Spencer’s move to extend payment terms from an already lengthy 60 days to 75 days is a financial blow for many small businesses. Marks & Spencer told the FSB this change is “moving in line with their competition” but the FSB argue this is a deeply disappointing change in policy.
“The FSB would have expected more from the company who in many other parts of their business aim to set the gold standard. Moreover, it runs contrary to efforts being made by Ministers across Government to resolve this practice of extended payment terms. It is also deeply ironic that Marks & Spencer’s has signed up to the ‘Prompt Payment Code’.
“FSB research suggests that around three quarters of small businesses (73%) have experienced late payment for their supplied good and services with consequential effects on their businesses. Indeed we know from talking to members that it can have serious consequences on cash flow thus affecting staff payments, morale and confidence even to the extent the business owner can’t pay themselves. Around four in 10 that are paid late go on pay their own suppliers late or struggle to pay their staff that only have a negative impact on growth and investment just at the time the economy is picking up.”