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Bombardier Transportation UK Ltd poor payment practice exposed in Small Business Commissioner report

Published 13 February 2020

The Small Business Commissioner, Philip King, has uncovered poor payment practice at Bombardier Transportation UK Ltd after investigating a complaint made by small business, Alistair Hugo Catering and Events.

The official complaint was logged with the Small Business Commissioner after Bombardier failed to pay four invoices totalling £5,600.24 for catering services provided. The oldest invoice was paid 223 days late.

Alistair Hugo Catering and Events made several attempts to resolve the issues however, payment was only made upon the intervention of the Small Business Commissioner.

Bombardier’s internal systems and processes broke down and proved to be reliant on individuals. They were unable to reconcile invoices against purchase orders or identify relevant individuals responsible to ensure payments were made.

Bombardier accept the late payment complaint made against them and acknowledge the failure of their internal systems, insisting this case is highly unusual. However, this contradicts their mandatory Payment practice reporting (PPR) data* which indicates Bombardier pay 61% of their suppliers outside of term, with an average time of 116 days to settle an invoice.

Bombardier have agreed to review their payment practices and will report back to the Commissioner within 60 days.

Small Business Commissioner, Philip King, commented: “The numbers speak for themselves and are simply unacceptable. 116 days on average to pay invoices with 61 per cent of invoices paid outside the agreed terms, and in this case an invoice paid 223 days beyond the due date. These figures say loud and clear that the supply chain is being exploited, and Bombardier’s own reporting shows this has been the case for at least the last two years.

“Large businesses must consider the impact they have on their supply chain, their actions must match their words, we need to see a fundamental change in behaviour. I expect to see better payment behaviour exercised by a global leader in the transportation industry and I am eager to see how Bombardier will turn this around.”

Mike Cherry, National Chairman of the Federation of Small Business (FSB) commented: “The new Small Business Commissioner has been swift to publicly call out Bombardier for its shocking payment practices and treatment of its small suppliers. FSB is pleased to work together with the Commissioner to highlight and stop bad practice.

“The evidence against Bombardier is a damning rap sheet of persistent and harmful late and non-payments. 79 per cent of invoices were paid after 61 days with the longest being paid after 210 days. Bombardier must change course, and other big businesses using their dominant position to bully small suppliers putting them at risk must realise they are on borrowed time. Nobody deserves to be treated like this and made to wait, to be paid.”

If you are a small business experiencing late payment issues with Bombardier Transportation UK Ltd or any other large business, please contact the Office of the Small Business Commissioner.

The Small Business Commissioner’s report can be viewed here.

ENDS

Contact: Manveer Mann on 0121 695 7761

Editors Notes

The Office of the Small Business Commissioner was launched in December 2017 to ensure fair payment practices for Britain’s 5.7 million small businesses, support them in resolving their payment disputes with larger companies and bring about a culture change in payment practices between businesses and across sectors.

In addition to investigating complaints about late payment issues, the Office provide a variety of free and impartial services such as:

  • Resolving disputes and dealing with unpaid invoices
  • Checking contracts and getting invoices right
  • Signposting small businesses to existing support and dispute resolution services
  • Interest Calculator on its website – allowing small firms to calculate interest owed on unpaid invoices.

* Legislation imposed in April 2017 required all large businesses to publish their payment practices.

www.smallbusinesscommissioner.gov.uk