The dramatic collapse of Carillion on Monday is starting to hit thousands of the firm's suppliers.

The ripple effect is going to be enormous and the ramifications have only just begun for the 30,000 small businesses thought to be owed money by the company - not to mention the many firms that supply those businesses.

The collapse is being compared to the banking crisis of 2008 and some of Carillion's suppliers are already having to lay off staff, while the banks are putting pressure on other firms, as reported by The Guardian.

Carilion had just £29 million left in cash went it collapsed, with debts of £900 million. Creditors are being warned that they are likely to receive less than 1p for every £1 owed by the firm.

Carillion launched its Early Payment Facility (EPF) in 2013 claiming it would "benefit all participating suppliers and have no detrimental effects on any suppliers." Suppliers could get paid earlier than the firm's 120-day terms directly by Carillion's partner banks in return for a fee.

But £350 million of cash owed to suppliers through the system will never reach them, as reported by Construction Enquirer.

The EPF was run in conjunction with banks including RBS, Lloyds and Santander who paid invoices once they were approved by Carillion. But the system stopped working once Carillion became insolvent. Subcontractors said Carillion had been delaying signing-off payments and questioning invoices in the run up to its demise.

Over the next few weeks, it will become clear that this is about far more than just construction, with the knock-on effect extending to a huge number of businesses from decorators and plumbers to skip hire companies, solicitors, accountants and advertising agencies. Suddenly they will find they're not being paid for work they have done and will be forced to make difficult decisions about staffing. Many companies won't even realise yet that they're caught in the Carillion crossfire - they might have had a contract that always paid promptly, not realising that the company was actually a supplier to Carillion.

Professor Stephen Roper, of Warwick Business School, said: "In December, just before the Carillion collapse, the government announced the appointment of the new small business commissioner to deal with payment issues for smaller firms and unfair payment practices.

"The collapse of Carillion and the payment challenges it raises for smaller sub-contractors looks like the first major agenda item for the new commissioner, Paul Uppal, and an opportunity for him to cement his role as a champion of small business.

"Carillion's failure threatens the viability of many small business sub-contractors which will either not get paid or, if they are lucky, will get late and partial payment. This is a situation all too familiar to many Carillion sub-contractors - the company had a record of painfully slow payment."

Punchline says: If there's one lesson to be learned from this mess, it's to chase your debts. Senior managers need to get their accountants and admin staff following up every invoice. Don't get caught short for being too nice.

What do you think? Email mark@moosemarketingandpr.co.uk