Advertising giant WPP, led by chief executive Sir Martin Sorrell, has been accused of breaching obligations under the UK’s Prompt Payment Code by asking employees to delay payments to suppliers until after the year end.
In an email seen by London financial newspaper City AM, hundreds of staff at WPP subsidiary Kantar were told: “Cash balances are one of the most important indicators there are of the health of a business and so every year WPP looks to maximise its cash position reported in the year-end accounts.” It asked employees for help chasing cash owed to WPP and “slowing down payments to our creditors”.
WPP is a signatory to the UK Prompt Payment Code. A spokesperson for WPP told City AM: “WPP policy, which applies to all subsidiary companies, is to pay vendors in line with contractual obligations and any extended terms agreed with suppliers.”
Federation of Small Businesses (FSB) chief executive Mike Cherry told the paper that delaying payments was “an unethical and debilitating practice that kills off 50,000 businesses every year”.