Shaming Late Payers

I got a chuckle out of a recent brief over on European Leaders which points to a recent study shaming the UK's worse offenders when it comes to the late payment of suppliers. According the analysis, "the issue of late payments -- and suppliers going bust as a result [will] become critical as the economic slowdown continues." Granted, the UK is nowhere near as bad as places like Italy where payment can sometimes drag into the next season -- or even the next calendar year -- but even moderately late payments can drive up supply risk, especially considering the parsimonious nature of banks at the moment when it comes to lending.

Given this, rather than simply delaying cutting a check or the equivalent of an ACH transfer or wire, perhaps it would make better sense for UK companies -- not to mention those on the continent -- to take advantage of new EIPP (electronic invoice payment presentment) technologies. These solutions lay the ground work to enable companies to actually profit from paying suppliers early through more aggressive -- and often flexible -- discounting arrangements where a bank is the one actually fronting the cash. And if that's not a win-win in a tough economic climate, I'm not sure what is.

- Jason Busch