Dell named in late payment 'Hall of Shame'

The Forum of Private Business has accused Dell of being a poor payer after it extended the time it takes to pay suppliers by 15 days.

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The Forum of Private Business has accused Dell of being a poor payer after it extended the time it takes to pay suppliers by 15 days.

Dell recently wrote to its suppliers telling them that it will be “standardising” its payment terms, from 50 to 65 days from 10 July. It blamed the change on “current economic conditions”.

A spokesperson for Dell said: “The 65-day payment term is being put in place on a global basis for Dell’s non-production procurement, which includes vendors such as telecommunications companies, insurance companies, financial services, service vendors.

“The change is being made to fully standardise Dell’s payments; the company’s production procurement already is on a 65-day schedule.”

The company added that" certain diverse suppliers" will be exempt from the new payment terms.

“[Exempt suppliers include] many certified small vendors, whose terms can be shorter, generally ranging from 20 to 45 days,” it said.

Nonetheless, the Forum of Private Business has named Dell in its late payment Hall of Shame, as part of its campaign against the practice of companies delaying payment to suppliers, which can be especially difficult for small firms. Dell joins other "poor" payers including Argos, Carlsberg and United Biscuits.

The Forum has also written to Dell, inviting the company to sign up to the Government’s Prompt Payment Code, which provides guidance and encourages companies to pay suppliers on time.

Phil McCabe, Forum spokesman, said: “Companies like Dell have a responsibility to pay promptly – failure to do so can mean the whole supply chain seizes up.”

“When they receive a letter like this, smaller suppliers have no choice but to agree and stay silent. There is little room for bargaining. For the sake of small businesses and the economy the new government must prioritise tackling the culture of poor payment, addressing the bully boy behaviour of these bigger companies.”

Although small businesses have a statutory right to charge interest on late payments under the Late Payment of Commercial Debts Act 1998, the Forum said that few firms take advantage of the law for fear of losing business.

In the Forum’s latest Economy Watch survey, 18 percent of small firms said the problem of late payment and changes to payment terms and conditions has become worse. Moreover, on average 36 percent of respondents’ turnover was tied up in late payment at any one time.

In addition, the Forum recently carried out research which found that 37 percent of late payers take between one and three months to pay invoices.

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