The Federation of Small Busi-nesses (FSB) has accused large firms of "exploiting small businesses" by delaying invoice payments and imposing new terms and settlement fees.

The FSB has uncovered evidence that some big firms are making smaller organisations wait longer and longer before getting paid, often changing terms with little notice. In the baking industry, sources have told British Baker that supermarkets are imposing tougher terms on suppliers, including extending the time within which invoices are paid.

One supplier, who asked to remain anonymous, said there had been a general trend towards supermarkets and other large grocers extending invoice payment terms. Many said they were simply benchmarking terms against other retailers. "If they are all benchmarking against everyone else, I’d like to know why they don’t shorten their terms," the source said.

Laws do allow small business owners to charge interest on late payments, but many are reluctant to do so for fear of losing business, the FSB added.