THE Forum of Private Business has submitted Freedom of Information Act requests to every police force in the UK in order to find out how quickly they pay their suppliers.
It comes amid ongoing concern at the time small amd medium-sized firms are having to wait for payment from bigger companies and organisations.
Financial Mail has highlighted cases such as IT giant Dell, who recently increased the time taken to pay small suppliers from 50 days to 65 days. Unilever has also been criticised after extending payment terms to 90 days.
Under the Government’s prompt payment code, government departments and organisations are supposed to settle bills to small firms within ten days.
The FPB previously carried out research into whether local councils were settling bills on time.
FPB spokesman Phil McCabe says: ‘Many smaller businesses carry out work for public sector organisations, so we have been using the Freedom of Information Act to check that they have been following instructions from central government, issued in the wake of the financial crisis, which compel them to pay their bills within 10 days wherever possible.
‘With annual procurement budgets running into tens or even hundreds of millions of pounds, police forces are a significant source of contract work for firms around the UK so we want to ensure that they are supporting small businesses by processing invoices promptly.’
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THE Office of Fair Trading is calling on small and medium-sized firms to let it know what barriers they face in trading online.
Small businesses increasingly rely on services such as search engines, online market places and payment service providers as essential steps to trading over the internet. Yet some firms have complained to the OFT that the way larger firms operate in these areas act as an obstruction to smaller businesses either trading online or expanding.
Research by the OFT suggests that small firms often depend on particular providers and are therefore more sensitive to any system changes or a loss of service; while the way that different providers respond to consumer complaints about a business can sometimes ‘be disruptive’ to the firm in question.
However, the research also highlighted many positive points, for example, the fact that innovation by larger companies has helped to bring costs down for smaller firms looking to set up online.
The OFT wants to hear from small firms about their experience trading online and whether they face additional obstacles to trading online that they think the OFT should be aware of..
Responses should be sent to onlinemarkets@oft.gsi.gov.uk
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Fears are growing that online grocer Ocado may have to shelve its stock market flotation or accept a drastically lower valuation, after leading investors balked at the price.
The business, which published its prospectus last night, is aiming for a post-float valuation between £995m and £1.37bn – at the top end of what many in the City were expecting. Several heavyweight fund managers told the Mail yesterday that they would not be buying into the float at the current price.
One, who asked not to be named, said: ‘We wouldn’t touch it with a bargepole at this valuation.’ another commented: ‘This valuation looks expensive.’
Robert Talbut, chief investment officer at royal London asset Management, which controls assets worth £35bn said: ‘We are struggling with the valuation they are trying to ascribe to the business. We are unconvinced that it represents good value.’
The fund managers’ views will be a blow to chief executive Tim Steiner who has been trying to garner support in the square Mile. The next two weeks are crucial for the former Goldman Sachs banker. He and his eight-strong team of advisory banks will have to decide whether to press ahead with the listing or accept a delay.
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SMALL business owners are being urged to ensure they file details of staff expenses and benefits to Revenue and Customs before the forthcoming deadline, to avoid facing a fine.
Employers have until 6 July to report the value of expenses and benefits provided to staff over the last tax year. This involves completing a P11D form for the 2009/10 tax year for all employees earning £8,500 or more a year – including basic salary and any expenses and benefits. P11D forms identify the expenses and benefits on which Class 1A National Insurance Contributions are payable.
Company bosses that fail to file details in time face a penalty of £10 per 50 employees for each month or part month that the return is outstanding.
Andrew Shaw, a tax partner at accountancy firm Kingston Smith LLP, says: ‘The value of any expense or benefit reported on a P11D is essentially the cost (including VAT) to the employer of providing it to the employee.
However, if the employee has repaid any of the amounts or if tax has already been deducted through the payroll then it’s up to the employer to notify HM Revenue & Customs (HMRC) through the P11D form.
‘Late filing will result in a penalty and firms will receive further penalty notices in November and again the following March and July if the P11D form is still outstanding. Obviously, these charges can add up so it’s worth getting your form in on time.’
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BRITISH firms quicker to adopt flexible working practices
British businesses have been quicker to adopt flexible working practices than French and German ones, according to a study by remote services firm Citrix Online.
In a survey of 3,000 public and private sector firms almost half of British businesses said they had seen an increase in workforce mobility over the past five years, compared to 31 per cent in France and 27 per cent in Germany. More than half of respondents stated their company provided technology to enable virtual working, with mobile computing devices such as laptops or notebooks the most popular, followed by smart-phones.
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CLOSE Treasury has launched two new notice accounts aimed at small and medium-sized businesses.
The four month account will pay annual equivalent interest of two per cent, while the six month account will pay interest of 2.4 per cent annually.
Figures show the average rate of interest paid on business deposit accounts of £10,000 or more is just 0.61 per cent, with small businesses holding around £54.5 billion in deposit accounts in high street banks.
Firms must have a turnover of less than £43 million to open an account, and there is a minimum deposit of £10,000.
Interest is paid every six months, though small business owners should be aware the rate is variable.
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THE Institute of Chartered Accountants in England and Wales is urging small business owners to make sure they are prepared for the holiday season.
It warns that with staff being away firms need to make sure they have procedures in place to prevent the business suffering. These include ensuring that any debts or payments are collected and chased to ensure that cash is still coming into the business. Paying invoices on time is also important to avoid damaging the business’ credit record.
Making sure staff complete a proper handover to employees taking on their responsibilities is key, for example, if the person authorising payments is away, make sure that someone else can authorise it in their absence.
Clive Lewis, head of enterprise at the ICAEW, says: ‘This is the time of year when most staff will be taking their holidays. This year, with the economic recovery still uncertain, it is essential that firms examine their debt collection and bill paying procedures and ensure proper safeguards are in place. Planning ahead can minimise disruption and keep the cash flowing.’
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CBI in call for employee strike reform
The regime governing strike action and redundancies should be tilted in favour of employers, according to the Confederation of British Industry (CBI).
In a series of proposals it says will sustain Britain’s labour market, the CBI will say today that the system of strike ballots should be tightened, so that 40 per cent of the workforce must approve industrial action.
The business body also wants consultation on redundancies to be shortened from 90 days to 30 days, ‘to reduce uncertainty for staff and allow employers to reshape their workforces swiftly’.
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THE British Chambers of Commerce (BCC) has launched an advice line to help small and medium-sized firms concerned about the impact of health-related employee absences.
The free Health For Work advice line will offer small businesses expert advice and support on how best to deal with employees who have health problems.
Employee absences because of ill-health can significantly affect smaller firms in particular, with many business owners unable to afford to replace staff who are off sick long-term. And poor health can seriously affect the performance of employees who continue to work.
Estimates suggest more than 30 million working days are lost every year as a result of illness, with back pain a common problem. Work-related mental health issues such as stress, anxiety and depression are also increasing.
The BCC is urging firms to develop a plan to ensure they deal with employee sickness absence effectively and sympathetically. Small business owners should also establish how they will deal with similar problems in the future, as well as looking at ways to make the workplace a healthy one.
David Frost, director general of the BCC says: ‘The impact of employee ill-health on small and medium-sized companies is an important issue. While most firms offer some level of support, it is essential that more are able to provide effective help to staff – not least through ready access to good occupational health advice.’
Health For Work advice line – 0800 077 8844
You can also read advice from FMWF blogger and leading employment lawyer Peta Fluendy in one of her recent posts – Tribunals flooded with cases involving health problems
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SMALL businesses are being forced to wait an average of 41 days longer than the originally agreed payment terms before invoices are being paid.
Research by Bacs Payment Schemes Ltd (Bacs), which handles direct debits, shows that firms are coming under increasing pressure because of late payments. It comes as charity Refugee and Migrant Justice said it was going into administration, with reports blaming late payments from the government as the reason.
Mike Hutchinson, head of marketing for Bacs, says: ‘The late payment problem is escalating and there has been an increase of 9.5 days on the time companies have to wait to be paid, compared to this time last year.
This undoubtedly has a dramatic affect on small businesses viability, contributing to major cash flow issues for many companies.’ According to Bacs, nearly 40 per cent of firms say large companies are the worst offenders when it comes to settling bills; 17 per cent blame sole traders while 17 per cent believe other small businesses are the main offenders. Just six per cent of those firms questioned cited not-for-profit organisations and government as the worst payers.’
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SMALL businesses are falling behind in the ‘green’ business stakes, with figures suggesting that only 12 per cent of small firms in the UK monitor their carbon footprint.
This compares to 20 per cent of all firms in Britain. Fewer than a third of small businesses have a policy in place to invest in low carbon equipment, compared to 58 per cent of large companies.
The survey by workplace solutions provider Regus suggests that smaller firms are often less inclined to invest in low carbon equipment because of its higher cost, and because the short-term needs of the business are more urgent than long-term investment.
Almost half of small firms questioned said they would only invest in low carbon equipment if it were cheaper or the same cost to run as conventional equipment. But three quarters of small businesses said they would invest ‘significantly more’ in green technology and low carbon equipment if the government offered more tax incentives to do so.
Mark Dixon, chief executive officer of Regus says: ‘Ambitious Government targets are clearly not taking into account the reality of green equipment take-up among smaller firms – yet small and medium-sized businesses account for half of the UK’s business turnover. If the Government is serious about meeting ambitious carbon emission reduction targets by mid-century then it needs to properly incentivise the change.’
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ONLINE retailers could be missing out on hundreds of millions of pounds in sales every month because of online checkout ‘queues’.
According to online payments provider Moneybookers, 54 per cent of consumers have chosen goods online, gone to pay but then abandoned them because they had to wait too long for the payment to be processed. It claims that it can take more than seven minutes to pay on some leading British websites and involve as many as 11 different steps.
Consumers are also being asked for increasing amounts of personal information, say Moneybookers, and 74 per cent say they are concerned by the amount of personal data they are asked to enter. Nikolai Riesenkampfff, co-chief executive of Moneybookers says: ‘Consumers have every right to expect the online checkout process to be quick, simple and above all else safe. Retailers who don’t make every effort to ensure their customers can confirm their order as easily as possible are putting themselves at a real disadvantage.’
Tags: Enterprise Zone, entrepreneur, Financial Mail Enterprise, small business, small businesses, sme, SMEs, start-up, Starting a Business
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