Plea to Scots entrepreneurs to support campaign for prompt bill payment

SCOTTISH businessman Ken Lewandowski is hoping to enlist support from the country's leading entrepreneurs in a campaign to force companies to speed up the payment of bills.

Lewandowski wants a change in the law requiring invoices to be paid within 30 days to give thousands of small firms a better chance of survival.

Lewandowski, a former chairman of Hibernian Football Club who now chairs a number of small firms, is planning talks with government ministers and is approaching some of the country's biggest business names in the hope that they will add weight to his case.

"It hurts me when I see good companies go to the wall through no fault of their own," he said.

"This would cost the government nothing and if everyone paid within 30 days everyone would benefit as the money would circulate and companies could make plans."

He accused some bigger companies of extending payment terms to 90 days and using unpaid bills as working capital.

The Institute of Directors is throwing its weight behind the campaign. David Watt, executive director of IoD Scotland, said: "The legal requirement for 30-day payment terms is important to safeguard the future of thousands of well-run SMEs across the country.

"Far too many of these firms, which represent more than 90 per cent of Scottish businesses, are going to the wall not because of mismanagement or poor performance but due to cash flow problems caused by not being paid on time."

But a note of caution came from Colin Borland, Scottish representative for the Federation of Small Businesses. While the FSB has long campaigned for measures to improve payment terms to small suppliers, he believes resources are needed to enforce the statutes that already exist.

Legislation already allows suppliers to charge interest on overdue payments, but Borland says few suppliers can afford to take this sort of action against their major customers.

But he agreed that the problem needs a fresh approach. "Some big businesses like to use their small suppliers as a free overdraft, and pay them when it suits. The worst offenders are large PLCs, and the figures show that."

He would like to see more random checks on companies and the publication of data showing how long companies took to pay their bills.

"We need an authoritative league table so suppliers can go into these situations with their eyes open," he said.