TSB has provided vital cashflow to small and medium sized business suppliers during the pandemic, paying 96% of invoices within seven days over the last six months – going further than the new requirements of the Prompt Payment Code which were announced last week.
According to the Federation of Small Businesses over £23bn of late invoices are owed to businesses across Britain and over 60% of small businesses have been subject to late or frozen payments in the wake of the Covid-19 outbreak.
TSB committed to paying these suppliers in less than ten days in March 2020 – a key part of its responsible business strategy, the Do What Matters Plan.
TSB’s seven-day payment record also goes beyond the new requirements of the Prompt Payment Code, which was last week strengthened to require companies to pay 95% of small suppliers within 30 days, from 1 July 2021.
Alongside this prompt payment, TSB has also pledged to write a 30-day guarantee into all supplier contracts going forward, as a further commitment to the UK businesses it works with in the future. In the second half of last year, 99% of all invoices were paid by TSB within 30 days.
TSB Corporate Strategy Director and Executive Sponsor of TSB’s programme to support SMEs, Marc Armengol said: “Small businesses are the backbone of the British economy and it is important in these challenging times we do everything we can to help them survive and thrive.
“Lockdowns have put additional pressure on their cashflow, so we looked to speed up the time it takes to pay our supplier partners, particularly the smaller ones, to help relieve this pressure.”
Interim Small Business Commissioner, Philip King said: “We welcome TSB’s successful application to join the Prompt Payment Code, and in particular the steps it has taken to go beyond the commitments of the code. Problems linked to the late payment of suppliers can cause real hardship for small businesses at any time, but they are of greater significance now as they feel the continued impact of Covid-19. TSB is providing a positive example of prompt payment practice and I hope to see more leading businesses in the financial sector following TSB’s lead.”
Head of Economics at British Chambers of Commerce, Suren Thiru said: “With firms continuing to report significant cash flow difficulties, and our research suggesting that late payments have risen during the pandemic, we are pleased to see the proactive steps taken by TSB to ensure their suppliers are paid in a timely manner. The action taken by TSB, which goes beyond the agreements in the Prompt Payment Code, is a good example of what can be done to improve relationships between businesses – a key part in addressing the problem of late payment.”