Delays in payments are a common problem across many industries today and can sometimes result in disastrous consequences.

Historic Manchester-based building services company Barratt, went in to administration in November last year after several contractors withheld payments worth £3million, which resulted in job losses and eventually the demise of the company after administrators failed to find a buyer.

Suppliers and sub-contractors are often left to bear the brunt of a collapse, Barratt’s vendors are no exception-with predictions that claims will amount to almost £2million.

While late payments are frequent in business transactions; many companies now use eProcurement software to enhance supply chain visibility which can help in monitoring payments as and when they are due. Feature-rich systems can even provide detailed information about suppliers by capturing contract reviews, payment-term adherence, KPI’s and SLA’s.

Supply management reported on the Capgemini Executive Insight Survey, which found that 29 per cent of the US companies surveyed had experienced negative repercussions caused by delayed supplier payments, including damage to growth and impacts on revenue, proving that a small postponement can certainly have a dramatic knock-on effect in an organisation.

The need to stimulate cash flow has never been more important-with many businesses struggling on the back of the recession and with talk of a double-dip on the way, ensuring supplier reliability will be an important factor in successfully achieving savings and meeting targets in procurement this year.