What have Liverpool and Arsenal football clubs in common with Music Magpie?

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Football clubs were among the quickest to pay their suppliers. Liverpool managed an average of 27 days, beating Arsenal’s 35. Entertainment Magpie, as Music Magpie – an online reseller of CDS, DVDs and books – pre-owned, refurbished, and fully guaranteed –  was the fastest payer, averaging just five days, with 94% of invoices settled within 30 days.

Companies that have more than £36m annual turnover, an £18m balance sheet or 250 employees are now obliged to report to the business department twice a year their payment policies, practices and performance, due to concerns about the administrative and financial burdens faced by thousands of companies because they are not paid on time.

Small and medium-sized businesses may have to borrow to cover shortfalls and a shortage of cash can in extreme cases force them into administration.

SMEs are owed £14bn at any one time, according to the government. The Federation of Small Businesses says that late payment should be a top priority for government in 2018.  “FSB research demonstrates that a third of payments to small businesses are late with many turning to personal credit cards and overdrafts just to survive,” said Mike Cherry, the chairman.

Andy Bounds, Enterprise Editor of the Financial Times reports that filings at the Department for Business, Energy and Industrial Strategy (BEIS) reveal late payment of suppliers.

Most UK businesses take more than 30 days to pay their suppliers, with the average as high as 113 days. Filings by about 200 businesses show that only 29% of them manage to settle their accounts within 30 days or less on average, and that only 52% of invoices overall are paid in that timeframe.

UHY Hacker Young, the national accountancy group, which studied the filings, said the figures showed the government’s transparency push has “yet to make any significant impact on the culture of late payment”. It was reported that some businesses had standard payments terms of 120 days.

  • DS Smith, the paper, packaging and recycling group, had one of the worst records. Its recycling arm took 113 days on average to pay suppliers.
  • Waterstones, the bookseller, took an average of 69 days.
  • Clifford Chance Europe (a law firm) took 73 days.
  • Conviviality, owner of the Bargain Booze and Wine Rack chains, averaged 56 days.

None of the major supermarkets has yet reported its figures. Companies have until January or April to publish the data.

The business department said its new small business commissioner, Paul Uppal, would oversee a new complaints system and help to tackle late payments, potentially delivering a £2.5bn annual boost to the economy.

Richard Lloyd-Warne, partner at UHY Hacker Young, said: “Multiple governments have tried different ways to get bigger businesses to pay on time, including allowing them to levy interest on late invoices, and the much-delayed creation of a small business commissioner role.”

The new duty to report was “a good step” Mike Cherry, chairman of the Federation of Small Businesses said, but “changes need to go further to allow the naming and shaming of those businesses who are putting the squeeze on small firms”.

 

 

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One Response to What have Liverpool and Arsenal football clubs in common with Music Magpie?

  1. […] Earlier two football clubs were commended on this site: Liverpool managed an average of 27 days, beating Arsenal’s 35. The fastest payer was Music Magpie – an online reseller of CDS, DVDs and books – averaging just five days, with 94% of invoices settled within 30 days. […]

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