Published on Wednesday, November 7, 2018

TUI and Thomas Cook 'among worst offenders for late payments'

TUI and Thomas Cook are among the worst offending business for late payments, forcing some suppliers to wait several months for their cash, according to a new report.

Research by invoicing company Business Expert found that 96% of TUI UK Transport invoices are not paid within the agreed terms. It claimed that, on average, the travel giant takes makes suppliers wait 129 days for payment.

TUI Transport, which is only a small part of the TUI group, was the eighth worst offender in the UK, while Thomas Cook, which, according to the report, pays only 80% of its UK invoices on time and takes an average of 88 days to pay, was 25 on the list.

Since April 2017, companies with a £36 million annual turnover have been obliged to report to the Government about their payment practices. Business Expert said that only 4.7% of 6,613 companies in the latest Government report published in September pay all their invoices within 30 days.

As a result, it claims that small and medium-sized businesses are owed £44.6 billion in late invoice payments.

Business Expert said: "The TUI group is a favoured travel company among many in the UK and Germany. It is the largest travel and tourism company in the world and a part of the FTSE 100 Index. Shockingly though, the business is one of the worst offenders for late payments.

"A typical time for TUI to pay invoices is 129 days, that's 99 days later than agreed. TUI only manage to pay 6% of their invoices within 30 days." However, TUI pointed out that the majority of invoices to TUI Transport were from companies within the Group.

Business Expert said that Thomas Cook's practice of paying 80% of its [UK] invoices late 'shows how not to run a company'. However, a Thomas Cook spokesman said the figures quoted in the report related only to invoices submitted to the Thomas Cook corporate head office in London, which accounted for only 1% of the total received by the company.

"All our invoices from our main suppliers, such as hoteliers and airlines, go through our Peterborough office and there is a much lower late payment rate on these," said a spokesman.

"The invoices included in this report relate only to the overheads on our London office, such as stationary and other office costs. These account for just 1% of our total."

He also said he had written to Business Expert pointing out that data used in its report was out of date, claiming it had taken figures from the first half of the year, not the most recent half. He said that based on the latest data, Thomas Cook is not in the top 35 list of worst offenders.

Business Expert said: "There were 5.7 million small and medium-sized businesses in the UK in 2017, making up 99% of all businesses. Yet, these businesses are facing an ongoing problem: late invoice payments. On average, 62% of small business invoices are now paid once already overdue," said the report.

"This delayed payment has a huge impact on the finances of small businesses, putting jobs and businesses at risk.

"With 16.1 million people currently employed by SME's, making up 60% of private sector employment in the UK this is a very real concern."

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  • Late payments

    Back in 1988 I opened and ran Virgin Holidays in Florida then in 2000, New York. In New York, my exposure to Virgin was around $75,000 a month and invariably it would take 60 days to get them to react. I finally opted to ignore the threat of losing the business, I would simply tell them on a Thursday that I could not meet their flights and passengers that weekend due to lack of money. By some miracle, money always ended up in my account on Friday morning. You must not let them rule you. 

    By Peter Mackness, Wednesday, April 24, 2019

  • No excuse for late payments

    There is no excuse for late supplier payments in an industry where customers always have to pay in advance! 

    By Sylvia Cook, Thursday, November 8, 2018

  • Mmmm........

    Sounds a bit like their flights - LATE TOO OFTEN

    By Peter M42, Thursday, November 8, 2018

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