Northgate Information Solutions have doubled the time it takes to pay their suppliers. This increases the payment of invoices from thirty days to sixty days. Northgate are a provider of many public sector IT contracts. Effectively this means that contractors who invoiced for work carried out in July, expecting payment in August, will not be paid until September. This move has left many contractors out of pocket.
Northgate announced that they made these changes public back in June. They have defended their actions by saying that they are merely standardising their payment structure. They also stated that as their customers have changed payment terms, they had no choice but to pass these changes on.
Northgate have now found themselves listed in the Forum of Private Businesses’ Hall of Shame. This list serves to highlight companies who operate poor payment practices. The Forum of Private Businesses has also written to the owners of Northgate to remind them that their actions could have a serious effect on the business of their suppliers.
One supplier who has been affected by this change to Nortgate’s payment times said that this was proof that, “big companies are still trying to bully smaller suppliers.”
He continued, “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 have said that their suppliers have ten working days to decide whether or not to accept these changes.
Chief executive of the Forum of Private Businesses, Phil Orford, 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.”