Small business commissioner steps up focus on late payments

The small business commissioner has taken another step towards reducing late payment practices in the UK.

Paul Uppal has set up new resources to support small businesses and potentially provide answers in late payment disputes.

The move follows Small Business Minister Margot James revealing that a £2.5 billion economic boost could be experienced annually should late payment issues be overcome.

Meanwhile MarketInvoice has detailed how 62% if invoices issued by SMEs in 2017 were paid late, with the average value of those totalling nearly £52,000.

Mr Uppal took the role in October and has focused on delivering a 'culture change' in how businesses operate when it comes to payments.

Now a service to handle complaints has been set up in order to provide advice and guidance on how to ensure all invoicing is carried out properly.

Firstly, firms are encouraged to check invoices for mistakes and to ensure that the right individuals have received it.

If details are correct, businesses are then encouraged to chase for payments in order to get payment dates and to warn of the next steps should payment not be forthcoming.

The small business commissioner may step in if a business has less than 50 employees and it is seeking payments from a larger firm with an office based in the UK.

Mike Cherry, chairman of the Federation of Small Businesses, believes the move could help 'turn the tide' on the current late payment culture.

'Success will be a UK economic culture where a business that does a job promptly, is paid promptly,' he said.

Further research from Wax Digital has revealed double standards among many businesses, as they are demanding speedy payments when they are not paying their own suppliers on time.

Just 27% of those quizzed by the procurement firm said they paid their invoices on time and 69% said they regularly pay suppliers late.

Ineffective and inaccurate processes are often blamed but it still puts the businesses at risk of insolvency, especially if it is their major clients that are not paying.

Those facing difficulties may also want to consider alternative finance options to provide a short-term solution to cover late payments.

By Phil Smith

 

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