Fair Payment Policy 2013 - Proskips UK pay in advance for all subcontracted services
Fair Payments Policy 2013
Proskips UK are en route to becoming the leading UK Skip Hire provider. Our company is both a transport provider and broker throughout the UK. If we can cover the geographical region in our own lorries, with our own people, we will, otherwise we can connect our customers to local providers who offer their services at a fair price and who are responsible for the recycling and disposal of the waste they collect. This network has taken time to develop and we are proud of the services the companies we work with provide and the customer service they offer.
What do we mean by Fair Payment?
The Skip Hire sector is renowned for receiving late payments from construction contractors. Prowaste our sister company, operates accounts with some of the largest building companies in the UK and are continually receiving late payments. The payment terms Prowaste offer are 30 days after the job has been completed which is an industry standard. However, they are regularly receiving settlement up to 90 days after the job from companies with £100million plus turnovers who are in a financial position to honour the agreed terms.
These major businesses are abusing the position they are in.
The smaller sub contractors need the work so are forced to take on the projects yet have to find a way to finance the work for thebigger companies projects for months before the bills are paid.
This can go horribly wrong.
In a recent case with Pattons Group, a Northern Irish contractor that works with major clients including Waitrose, John Lewis and Primark, Prowaste provided multiple skips to multiple sites and the contractor continually paid Prowate late. Prowaste stuck with the customer as it provided a substantial annual spend with the company. As a smaller contractor Prowaste regularly carried out the vital health checks needed to keep on top of their clients credit worthyness and subscribed to a service provided by Barclays called Credit Focus.
The customer in question, Patton Group, was until the day they went into administration, advised by Credit Focus as a Low Risk. When the shocking news was released that The Group was going into administration Prowaste had racked up 90 days worth of debt totalling £70,000. As yet they have recovered nothing and from the looks of the administrators preliminary expectations they are going to receive nothing in the future. This leaves a large amount of money that Prowaste have to right off as bad debt which has crumbled other compnaies in the past.
There are alist of suplliers to Prowaste that need to paid and thankfully have been patient and suopportive in allowing the company time to pay down their own debt.
This was a hard lesson learnt but one that is sure to be repeated.
The argument could be that a sensible plan of action is for Prowaste and similar businesses to pay for credit insurance or factor their invoices, but this is an expensive choice. It is another cost that they will have to assume and another dent to their already diminishing profit margins. The fair solution is one where the major contractor pays a marginal premium on the service price to help their sub contractors cover the cost but competition stops this and the uninsured continue to price their services lower.
This problem is not only restricted to skip hire and waste management providers but to all subcontractors working in the construction sector.
Proskips which works with smaller building compnaies and residents throughout the UK has two simple rules. before you need the service we ask that you pay for it on a credit card and we will in turn pay the provider or suppliers that carries out the work in advance.
This is a truly Fair Payment Policy and means the service that we offer is superior to our competition.
If this attitude was adopted throughout the world we would have a far healthier corporate society that only books services they can afford.