High street lender TSB has called on rivals Co-Operative Bank and Metro Bank to speed up supplier payments after it found the banks are among the worst culprits for paying small firms late.
Co-Op bank pays just half its suppliers within 30 days, while Metro Bank topped the list of overdue invoices at more than one in four, according to TSB’s data.
The numbers put both Co-Op and Metro Bank below the voluntary standard ‘prompt payment code’ which requires signatories to pay 95 per cent of invoices to companies with fewer than 50 staff within 30 days, and 95 per cent of all invoices within 60 days.
Late supplier payments by big firms have come under scrutiny during the pandemic as supply chains were snarled and delayed payment terms played havoc with small businesses’ cash flow.
The government’s Small Business Commissioner Liz Barclay warned in City A.M. earlier this year that the UK was facing the loss of 440,000 small firms this year as a result of poor payment practices, as well as “the talent that could drive future prosperity”.
In a separate statement today, she said that firms need big businesses to cough up quickly for small businesses “now more than ever”
“If they don’t get paid quickly, they can’t manage their cashflow and may well not be around the next time you need them. And it can be very expensive in time and money to find a replacement supplier you can trust,” Barclay warned.
TSB’s Director of Customer Banking, Mark Curran called on banks to put “minds to task” to resolve the issues.
“Paying business suppliers on time is critical not only to healthy cash flows and working capital but also reducing the mental burden on owners so they can focus on what matters most to grow their business,” he said.
UK bank Barclays warned earlier this year that big businesses are threatening smaller suppliers’ survival with late payments after figures revealed 90 per cent of medium sized firms were waiting for customers to settle overdue bills.
A Co-operative Bank spokeswoman told The Times the bank had “good relationships with its suppliers and works with them to ensure invoices are correctly paid” but admitted “There is more the bank can do.”
A Metro Bank spokeswoman said: “Our overall payment performance is not where we want it to be. We are currently investing in our payment practices and infrastructure.”