The recession has been tough on all of us.
I have friends that have lost jobs, like many of you, no doubt.
My own business, Ethical Corporation, has been hit as much as any in the business services sector.
We had to make one redundancy, and haven’t replaced quite a few who have left.
We’ve all taken a hit, tiny or no pay rises and smaller bonuses, if any.
But even we, as a tiny company in the sea of multi-nationals, still pay our suppliers within 30 days.
Maybe once in a while an invoice goes awry and it’s 35 days or so, but our policy is always to pay on time, even when we had to borrow money in one quarter from our investors to pay the bills.
Which is why, capitalist though I am, I find it so hard to stomach the idea of profit-making companies lengthening supplier payment terms to maximise returns.
Aside from the ethics of it, it smacks to me of laziness.
It says: “rather than focusing on opportunity and innovation, let’s squeeze the supply base for a few drops more”.
Morally speaking, it’s just wrong. There’s no two ways about it.
Companies do it because of greed at the top, and because executives who have reached that level choose not to think about the impact their decisions can have, particularly on smaller companies.
We’ve criticised Tesco’s practices recently, for paying non-food suppliers on 60 day terms.
But some recent news on supplier payment terms is even more surprising.
Carlsberg, the Danish brewing brand with a prominent link to “CSR” on its website, is now taking up to 120 days to pay suppliers.
The official policy, confirmed, says the Forum of Private Business (FPB), by Carlsberg marketing director David Scott, is 95 days.
But if an invoice is issued “early in the month”, according the FPB, a small business lobby group, suppliers could wait 120 days to get paid, double that of Tesco’s suppliers.
Carlsberg announced pre-tax profits of £344 million for the second quarter of 2009.
The Forum of Private Business has a late payment “Hall of Shame” on its website.
You’d be surprised at the list of companies.
Others include Argos, InBev and Diageo.
All firms with stated responsible business policies and practices.
The UK Government, known more for squeezing small business itself over larger, more mobile firms, has even developed a Prompt Payment Code.
A lot of the banks have signed up for it.
Now what about the retailers and brewers?
Time for them to step up, if they want to be taken seriously on corporate responsibility.