smallbusiness.co.uk: Helping your business think big

High-profile companies have signed up to a government initiative to ensure timely settlement of debts to smaller enterprises.

Business minister Shriti Vadera reveals that 11 large firms, including Barclays, Sony UK and B&Q, have agreed to abide by the Prompt Payment Code, which demands they pay suppliers as set out in their contractual agreements.

The minister comments: 'Late payment can be the final straw for small business in the current climate. So the commitment here today by major companies heading up supply chains to pay on time is a win for all businesses.'

In addition, Lord Mandelson, business secretary, welcomes the fact that more large firms have showed commitment to helping smaller enterprises.

He adds that the government is supporting small businesses by ensuring bill settlements are carried out quickly, with nine out of ten invoices being paid within ten days.

The new pledges to the code were made at a seminar on good payment practice held by the Department for Business, Enterprise and Regulatory Reform yesterday.

According to payment processing body Bacs, the amount of late payments owed to small businesses increased by 40 per cent from £18.6 billion in 2007 to £25.9 billion in 2008.

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