In last month’s Budget announcement the coalition government unveiled plans to clamp down on late payments by extending the Prompt Payment Code, aiming to make 30-day payment terms the standard, with 60 days the new maximum limit.
Late payments are a huge problem for UK SMEs, hampering cash-flow and, in the worst cases, threatening the very survival of small businesses. A significant slice of the PR industry is made up of small to medium-sized agencies who rely on prompt payment from their clients in order to cover rent, pay staff and remunerate suppliers. Keeping the best staff and suppliers in a competitive market such as PR can be a battle, which is made all the more difficult to win when you’re struggling to pay them.
But this week, following a PRCA Leaders Panel, which revealed that a quarter of PR Agencies report that clients are taking over 30 days to pay, the PRCA has launched its own 30 Days campaign, calling on organisations to pay their agencies within 30 days.
As a mid-sized agency that works on a campaign basis rather than having clients on fixed retainers, 4mediarelations knows only too well the pitfalls of late payment.
Financial Director Keith Donoghue said today; “At 4mediarelations we work with a range of clients, from large organisations, to SMEs and often see a variety of adverse payment terms. Whilst attempting to maintain efficient cash-flow management, long payment terms or late payments can cause significant problems, especially with the commitment of overheads and running costs, including staff, freelancers and suppliers. I think the PRCA’s 30 Days campaign is an extremely important move for PR agencies and indicates the importance of how we need to be taken more seriously as an industry by outside organisations.”
By Phoebe Campbell