It's time the big boys played fair

Isn't it wonderful to see our high street banks making such healthy profits? It's nice to know that our economy is bolstered by successful corporations that understand how to make money. Surely they, of all people, can offer sound financial advice and guidance to the three million small businesses that operate in this country?

In my opinion, I'm afraid they fail in both cases. Nor can we put our trust in some of our most respected consultancy and accountancy practitioners or credit ratings companies.

I'm aware of situations where such organisations are being highly irresponsible about paying legitimate debts. Being prudent and writing the cheque only when you must is one thing, but withholding legitimate payments to smaller suppliers beyond 90 days is just madness. Late payments have always been a problem for smaller businesses but you would expect something better from these organisations.

Late payments cause problems. Smaller businesses are forced to squeeze their cashflow and extend their credit limits, putting money back into the pockets of the banks. I know of one value-added solutions provider that has been kept waiting up to and beyond 90 days by a major bank. This is a small business that has to pay salaries every month. So do their suppliers. Sooner or later, they will have to borrow money or go into overdraft.

Such actions force small businesses to the wall. You might then expect consultancy businesses and credit management firms to help out - to improve cashflow and avoid high-risk situations. But I know of a well-known consultancy and a supplier of risk information that have not paid their bills for six months.

These organisations are hypocritical. They put pressure on businesses and stoke up the raw material that recessions are made of. When smaller dealers aren't paid by their corporate customers they can't afford to pay their suppliers. Distributors then feel the credit squeeze. Working on wafer-thin margins already, they can't afford to add value and start to cut credit limits to dealer businesses. Resellers in turn find their business restricted. This adds pressure to the computer trade and ultimately the only winners are the banks.

I have not named the organisations involved, but I assure you they are companies you are familiar with. I've not named them because they would probably sue and the banks, the consultancies and the debt protectors are probably all the same - irresponsible, selfish and dangerous to the stability of the economy.

It's time the banks, consultants and the other professions put something back into our industry instead of seeing it as a money-making opportunity.

If you have stories of problems with late payments from organisations, I'd like to hear them. It's about time something was done to stop them.

Simon Meredith is a freelance IT journalist.