News
Industry welcomes Mandelson's prompt payment scheme
The print industry has welcomed a new Code of Practice designed to ensure small businesses are paid on time.
The code, developed with the Institute of Credit Management, was launched by business secretary Lord Mandelson at a prompt payment summit attended by companies including Asda, John Lewis Partnership and British Gas.
Businesses that sign up to the scheme, which is available online, are required to follow different procedures to existing schemes such as The Better Payment Practice.
The aim is to establish a clear policy in paying bills with a facility to raise concerns about late payers.
Lord Mandelson said: "It is critical we understand what payment issues are affecting small businesses and this summit will give us greater insight into the situation at ground level. The prompt payment of bills is an economic imperative and crucial if we are to protect supply chains from collapse."
Mark Snee, managing director of Technoprint, said: "The government has to make statements like this and the sentiment is right. There's no reason why big companies should be making late payments."
He added: "It would be interesting to see what would happen if a statutory interest rate on late payments was introduced."
Andrew Brown, corporate affairs director at BPIF, said: "If the print is being supplied through a print management company, it's important that they also pay promptly any company doing their printing.
"Otherwise it's the print management company that benefits because it effectively gets extra credit."
He added that end buyers must put pressure on their intermediaries to make sure payment happens on time.
Central government recently committed to paying its suppliers within 10 days.
Lord Peter Mandleson
Comments
John Grogan - 15 December 2008
It's Pathetic,once again the government don't have the balls to tackle the issue at source. Suppliers are suppliers not banks. It's barbaric that our customers pay us late, so we pay our suppliers late' we all employ people to chase money and invent whole new industries such as invoice discounting to address cash flow. It should be more similar to civilised nations where credit is 30 days, after which punitive interst rates kick in. The only UK example I can think of is The Government\(VAT)!
It is that simple isn't it? or am I in danger of applying common sense, where it's obilgatory to leave it at the door at the Houses of Parliament.
Bryn Oakley - 15 December 2008
I totally agree John!
30 days is just that. If everyone HAD to pay in 30 days, or to agreed terms, there would be much less of a problem. With the promise of an added late payment charge for those that stalled paynment, they would all think twice; especially if it were a dearer interest than the baks charge for the same amount.
Then us SME's wouldn't have to employ people to chase what is duly ours; use outside credit agencies; invoivce discounting services; or have large cash-flow overdrafts. What a saving on our businesses that would be. Come on Lord Meddlesome /sorry Lord Mandelson; start at the root, let us legally add 5% per month to late payers, then: problem solved!
- 15 December 2008
Practice would make perfect business sense if central and local government divisions paid within the terms agreed - unfortunately they `do not`. Wake up Lord Peter Mandleson to the `real` world that most large organisations pay creditors out of the terms agreed!
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Bill Cheesman - 15 December 2008
My own opinion, for what it is worth, is that we should charge exactly what the banks charge for unauthorised borrowing (the current euphemism for exceeding your overdraft). £35 as soon as it happens and then 29.5%.
Graham Glynn - 15 December 2008
On the very same day that the Government announced 10 day payment terms I received a tender from a large Huddersfield based PM/print company to procure mainly web offset volume work for the Inland Revenue. Their payment terms - 90 days end of month! Even worse than that - in the tender T&C's was a small print clause stating that the title of goods passed to them on DELIVERY not on receipt of payment. I declined to tender. Incredibly they still managed to get several web suppliers to participate. Things are not too good for the web offset sector but surely no company is so desperate that they would agree to such terms?
lordof weboffset - 15 December 2008
Graham, We got it as well, and we are not bothering either. It's been a bad month or so for web offset, there must be something we can do to save our industry. Shall we all meet for a beer somewhere and see if we can find some common ground. It's no use us moaning about Print mangers or tenders etc. lets do something about it, before we all lose our jobs and the UK loses another manufacturing sector. We could all agree as an example that 30 days are standard terms across the sector, with standard penalties for late payment. Lets be honest, we will not need a very big venue. The Xerox story is just typical, albeit an extreme example of some of the rubbish we have to deal with and put up with, only because we fear that one of our competitors may desperately say yes, and then a new bench mark has been set. Happy Christmas
Annie Mation - 15 December 2008
This is no more than a palliative regurgitation of the existing law that permits debtors to claim interest on overdue debts. In practice it amounts to zero. If Mandelson is real about this he will know the "code" needs to be enshrined in a law that requires invoices must be paid within X days unless the parties have expressly contracted out of the statutory obligation and that the late payer must be automatically liable for consequential loss because that's where the real damage is caused. The consequential loss should be something that cannot be contracted out of otherwise the idea can never work.
Brian Morton - 15 December 2008
I think Lord Mandelson's idea is sound but I agree that codes of practice are generally a bit of a waste of time. If all these big companies are so in favour of signing up to codes of practice why are they so opposed to the idea of those codes being legally enforceable? The answer is simple, they have no intention of complying with the codes but want to cynically posture their bona fides.
Graham Glynn - 15 December 2008
Dear Lord of Weboffset - is there really only 9 or so of us left? If it is possible to arrange such a meeting I would gladly attend. There are signs that seem to indicate a shift away from PM that will hopefully benefit those situated nearer the s**t end of the stick. Certain PM companies sheer arrogance will I believe hasten their downfall. Now may be the best time to at least curtail the worst of their practices.
Simon Biltcliffe- Webmart - 15 December 2008
compulsion won't work as it is likely to put lots of sound-but-unlucky businesses out of business. Especially now.
imploring doesn't -how many of you ACTUALLY invoice interest for late payment?
The cheapest and perhaps most effective would be to force people to publish their actual payment terms on a monthly basis -on the same form as a VAT return perhaps to eliminate the need for an additional bit of red tape?- and then everyone would be able to see who did what.
All accounts packages will calculate it at the click of a button. Audits would have to check this as part of their due diligence to validate it.
Once it is out in the open it would show suppliers the real decision they have to make in taking on work from clients.
Everyone would gain except the credit cheats & in one move one of the biggest costs, inefficiencies and risks for all businesses would be -nearly-eliminated.
Simon Biltcliffe
MD
WEBMART Ltd.
lordof weboffset - 16 December 2008
Graham,
Below is the list of Web offset printers in the uk; actually 18 of us. They are in no particular order.
Polestar
St. Ives
Southernprint
Pindar
Wyndeham
Cooper Clegg
BGP
Garnet Dicks
Artisan
Website
PCP
Apple
Westdale
Gibbons
Journal print
Warners
Ancient house
Woodford
Sorry if I have missed any one off the list.
How hard can it be to sort out a meeting to "discuss" the state of our sector?
We would need to be very careful about what we say and how we say it.
Item 1 on the agenda, terms. Item 2 Paper.
Any more agenda items anyone. Perhaps Printweek or the BPIF could do something to help.
Bill Cheesman - 16 December 2008
Simon - when the regulations first allowed interest for late payment to be invoiced, we did it with the following results:
1 The invoice was ignored
2 We lost the customer
Conclusion - it may be a statutory right, but it doesn't cut the mustard
David Brent - 16 December 2008
Dear Lord. If Paper Merchants were to do the same would not printers cry "cartel"?
Graham Glynn - 16 December 2008
Dear Lord Of Weboffset
Where did I get 9 from!
There is York Mailing, G&H and Trafford press to add to the list
If the BPIF won't get involved then maybe we should just split the list between us and contact each individual company. Energy costs should be put on the agenda. If we formed an energy purchasing consortium everyone should get a much better deal. \(I tried the BPIF one - it was more expensive than my existing broker)
lordof weboffset - 16 December 2008
David,
Web offset printers deal with Mills mainly not merchants. Either way we know that they all talk and exchange information.
Graham,
Apologies to the missing 3 companies; that makes 21 web offset printing companies in the UK. There are loads of things we can put on the agenda, both on the supply side and the sell side. We just need someone to stand up and organise it. We need a meeting room for about 30 people, a Chair person, and an agreed Agenda. We would probably need some kind of legal eagle to advise and ensure we keep within the law. A bar would also probably help, and maybe a dinner in the evening.
Total costs should not exceed £100 head, but would everyone come.
Darryl Danielli - 16 December 2008
PrintWeek would happily host a discussion on the threats facing the web offset sector. Email me at darryl.danielli@haymarket.com if you would want to take part and I'll get something set up.
Darryl
Editor, PrintWeek
Print Observer - 16 December 2008
the meeting sounds like a much needed plan
Robin Hood - 16 December 2008
Graham Glynn, Lordof weboffset et al
Guys, lets cut to the chase - deep down we all know that the PM's are killing our industry. It's a fair guess that they take at least £1 billion out of the UK web offset market and then kindly return it to us keeping at least 10% for themsleves shafting our margins to boot. Furthermore they then have the guile to pay said printers in 60-90 days \(or not at all in some cases)! Rebate factors also appear to another favourite, a false economy to which are fine until they become payable.
Whilst the murmerings of discontent continue we need to adopt a radical approach and a collective stance whereby we don't deal with aforementioned PM's - period. The paper guys under the guise of NAPM adopt their own rules as to who they collectively choose to deal with, so why don't we? Not sure as to how the mechanics of it would work but given the will and discipline to do so surely this would benefit our industry in the medium to long term. PM's would have their life blood removed and find it difficult to source work in Europe with the current strength of the Euro.In theory the customer would then deal direct.
Whilst I appreciate this suggestion will not go down too well with those overladen with PM customers but we have to be brave and act now before its too late. Web offset printing in the UK is not infalible, just look at the state of UK car industry. Carry on the way we are and we'll be remembered with the ship builders amd miners.
In summary:
- We are being had by the paper boys in terms of continual increases and lack of stock \(FSC is an absolute joke and merchant led - same tree, same paper, same processes but an extra few quid in the mercants & FSC consultants pocket)
- We are being had by the trade insurers who have made it clear they don't want to offer credit to the print sector
- We are being had by too many PM's touting the same work to the same printers knowing that whoever is the unluckiest to win the work is doing it at a loss but setting a precedent for the next time round.
Come on guys, lets stop thinking/moaning/worrying about it and be brave in our actions. Lets stop being bullied by the very guys that preach that they are our saviours and make the investments and hard work we have all put into our resepective companies return a level of profit and sustainability
WJM - 16 December 2008
Quote: "... interest for late payment, we did it with the following results: We lost the customer "
Brilliant! Welcome, everybody else, to the real world!!!!!!
Print Observer - 16 December 2008
In the words of Mr Gordan Ramsey, 'Grow a set of BLX' .... well looks like somebody just did..
Graham Glynn - 16 December 2008
Darryl/Lord of Weboffset/Shrek
Thank you Darryl for offering to set something up.
I suggest that as many web offset companies as possible contact Darryl and express an interest in taking part in this discussion. Hopefully sufficient companies will respond to make it a fruitful exercise.
Could I suggest Andrew Pindar to be the Chairman as he is universally respected,has a good grasp of the current situation but more importantly he actually follows up his words with action.
Print Observer - 16 December 2008
can I suggest that Print week contact all Relevant Companies? As this would start the process of as an impartial gathering of like minded companies.
Bryn Oakley - 16 December 2008
Hey guys, this quick paying thing affects all of us sheet-fed guys as well you know. and PM's get other work done too apart from Web Offset. I'm definitely not criticising you web guys, but this does hit us too.
Peter Mandleson mentions SME's viz:
Lord Mandelson said: "It is critical we understand what payment issues are affecting small businesses...
Few of the 21 Webco's mentioned above are in what I would call the SME bracket. However I am all for you taking the founder steps of the WOPA \(Web Offset Printers Association) or whatever you end up calling it. Good of you, and the very best of luck, I sincerely hope you can change things for your hard-hit sector. I just wish everyone else in the general printing sector would grow a new set of Gordon Ramseys, and do the same as you guys are doing.
Print Observer - 16 December 2008
Bryn, thanks for your kind comments. to lay foundations for the WOPA is a fantastic thought, if we can get enough people to subscribe to the idea, it may just be possible. heres to a more prosperous 2009!
Darryl Danielli - 16 December 2008
More than happy to contact the relevant companies and drum up some support for a meeting. If you guys on the forum can help that would be great - feel free to email at the above address \(anonymity guaranteed) as it would be good to get some 'rules of engagement' and topic ideas from you all.
I can look in to the legal implications etc, but the key thing is to get as many of the key senior players involved as is possible, as without them it could be a fruitless exercise.
Print Observer - 17 December 2008
afternoon all, quiet on the western front today... do we have any movement on the meeting?... would be an idea to keep the momentum going between now and the new year. (passion . drive. belief . commitment) well thats what the Mrs tells me anyhows
bankofdad - 18 December 2008
Its interesting that this discussion has been picked up by an American Assocaition the PDSA and it is highlighted in their latest newsletter.
"Prompt Pay Spotlighted in the UK
The British government has developed a program to speed up payments to small businesses, according to a story in printweek.com ........ Also interesting are reader comments following the story."
A Printbuyer - 18 December 2008
A few years ago there was a similar informal group set up of "Independent Web Offset" companies who had meetings at each others factories....I remember meetings being held at Cooper Clegg, Graphoprint, Jarrolds et al . The nasty big boys at Polestar \(not invited) were derided for reducing the market rate and selling cheap to the big publishers....but they did get to talk about consumable prices and manning levels and so on.....Good Luck in stabilising the market.
And what about including: Century, Waddington and Ledger, Blackburns, Graphic Inline, Howitts, Aldersons, Headley Brothers, Centre Web, Howard Hunt
Darryl Danielli - 19 December 2008
Just to keep you all updated, we've starting to contact the relevant senior people in the publications web offset market, with a view to having a meeting in early February.
I've got some guidelines from the Office of Fair Trading, and the next stage is to contact a lawyer for advice.
All we need now is a critical mass of companies willing to take part.
'Not A Doctor' (NDCT) - 21 December 2008
What does this say about the industry's trade associations?
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