IT firm doubles time to pay to 60 days

Suppliers to a state IT contractor who would normally be cashing their invoices were out of pocket last night following its decision to double the time it takes to pay them.



Northgate Information Solutions, which boasts a strong portfolio of public sector IT contracts, said suppliers would have to wait 60 days, up from 30 days, to be paid.



Announced in June, the change means suppliers who invoiced for services rendered in July, for payment in August, will now have to wait until September.



The revision has won Northgate an unenviable place in the Forum of Private Businesses' Hall of Shame, which lists companies operating poor payment practices.



Following the firm's "disappointing" change to payment time, the FPB said it had written to its owners reminding of how extending it can put suppliers in jeopardy.



One supplier hit by what Northgate explained was merely a way to "standardise" its payment terms said the change proved "big companies are still trying to bully their smaller suppliers."



He added: "When I received the letter informing me that the company was standardising its payment terms, I thought it would be beneficial for us all to work together more smoothly. It took several readings before I realised what the catch is.



"It certainly isn't for the benefit of the supplier base that they are increasing the time they pay invoices from 30 to 60 days. One of the things I resent is that they are not being straightforward – they're pinching an extra 30 days from me."



Northgate has defended its actions, claiming its own customers have extended payment terms due to cash flow problems.



It said it has had to pass on the arrangement, and that suppliers had a choice, which they could take 10 working days to make, whether to accept the changes or not.



But Phil Orford, chief executive of the FPB, said: "Although we can sympathise with the company's claim that it is not being paid on time by many of its public sector customers, it is disappointing that it is passing on these additional costs to its small suppliers".