The CEO of construction firm John Sisk & Son has blamed the company's suppliers for submitting incorrect invoices which resulted in them being paid late.
Stephen Bowcott said late payments make up just 15% of the business, but that issues with their invoices slowed down payments to their suppliers.
Bowcott told Construction News: “With our major invoices from major businesses we pay 95 per cent of them within 60 days. The problem with the small invoices that come from further down the supply chain is that they have to match with a ticket, and if they are filled out incorrectly or don’t match, then we have to reject them, which brings it outside the 60 days."
Another construction company, Balfour Beatty, recently also blamed incorrect invoices for their delayed payments to suppliers. Chief executive Leo Quinn was quoted by Construction News as saying: “We pay according to the terms that we actually agree and if there is a delay it is quite often tied up with invoices that are not clearly presented and therefore have to be queried, and it’s the queries that take the time.”
Sisk was among the slowest 10 payers in Construction News' analysis of the CN 100 payment data. It was recently kicked out of the Prompt Payment Code by the Chartered Institute of Credit Management (CICM) which administers the code on behalf of the government. It was the only company to be directly kicked out of the code.
At the same time, 16 other companies including big names such as BHP Billiton, DHL, GKN, and R. Twining, have been suspended from the code. These companies have to come up with an action plan to lay out how they will achieve compliance within an agreed period.
The UK government is making it harder for big companies to get away with making tardy payments to their suppliers. From this September, any major contractor that bids for a government contract with a value of above £5 million per year will be required to answer questions about its payment practices and performance. Sisk will find it difficult to win government contracts of that size now that it is out of the code.