NFRC Concerned Over Travis Perkins Payment Extension Reports 

THE NATIONAL FEDERATION OF ROOFING CONTRACTORS (NFRC) has expressed concern over reports that major merchant Travis Perkins is extending its standard payment terms to 60 days from the end of the invoice month.

The move undermines progress the construction industry has made in improving payment practices, says the NFRC.

Reducing Insolvency Risk

NFRC comments that over recent years, the entire sector has worked hard to shorten payment periods.

The organisation adds that it is now widely recognised that prompt and fair payment is essential to improving productivity and stability and reducing insolvencies.

Richard Miller

“Construction continues to have the highest insolvencies of any UK sector, an alarming figure which is in large part driven by long payment terms,” said NFRC Director of Membership Richard Miller.

“Extending payment terms shifts financial risk through the supply chain and creates additional strain for smaller suppliers and contractors who are already facing tight margins,” added Richard.

Payment

Government has set a clear expectation by capping its own standard terms in public procurement at 30 days and also through the Fair Payment Code, which grants gold awards to businesses that pay at least 95% of invoices within 30 days.

NFRC feels that responsible companies in the private sector should follow this example, supporting healthy cash flow throughout the supply chain rather than holding onto payment to boost their own liquidity.

60-Day Default

NFRC members recently raised concerns about long payment terms in response to the Government’s Late Payments: Tackling Poor Payment Practices consultation.

Members warned that some businesses may use the maximum 60-day term as a default rather than a ceiling, especially if cash flow tightens when other payment loopholes are closed.

For this reason, NFRC has called on Government to reduce the statutory maximum payment term to 45 days, with the ambition of reducing to a 30-day maximum within 5 years.

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