We sat down with Ian Bickley, Head of Communications of the Office of the Small Business Commissioner, to discuss payment practices and how small businesses can defend against late payments.
I’m sure for many of you, myself included, pay day is a busy time in your bank account. Bills are paid, funds are transferred and what’s left can be budgeted for the month ahead. The majority of us are paid on the same day every month and everything happens like clockwork.
Imagine for a moment if your pay was a few days late, or worse still, didn’t arrive at all. What impact would that have?
Poor payment practices are an unfortunate reality for many small business owners in the UK and it’s hindering the growth of our economy. In some cases, it can cause businesses to close. It is estimated there is in the region of 50,000 ‘business deaths’ each year, many in part due to late or unfair payment practices.
Research has shown that up to a third of payments to small businesses are late and 20% of small businesses have experienced cash flow problems due to late payments. If small businesses were paid on time, it could help boost the economy by £2.5bn annually.
To help tackle the issue, the Small Business Commissioner (SBC) was created following an extension of the Enterprise Act 2016. We act on behalf of SMEs across the whole of the UK - England, Wales, Scotland and Northern Ireland – to tackle late payment and unfavourable payment practices in the private sector.
A healthy cash flow is vital to the success of small businesses and invoices not being paid or payment being sent late can have many negative effects. Just like we all have bills to pay every month, so do businesses, everything from office space, goods and services and employee salaries.
We provide a range of services to SMEs including general advice and information on matters such as resolving disputes. We also signpost small businesses to existing support and dispute resolution services through our website, as well as handle complaints about payment issues between small business suppliers (businesses with fewer than 50 staff) and their larger customers. We offer this service to small businesses risk-free and free of charge.
Britain has around 5.7m SMEs and poor payment practices are a real barrier for growth. Supporting businesses to innovate, grow and scale will boost our economy, which is why it’s so important we tackle the issue.
Our aim is to help resolve issues and keep business moving. The Small Business Commissioner website provides lots of helpful information and guides to help businesses get paid. From invoice templates to guidance on how to chase an invoice or calculate statutory interest on an overdue payment, we can support people every step of the way.
Late or poor payment practices can be very challenging to business owners and can often impact people’s health and wellbeing. Don’t suffer in silence; get help from the Small Business Commissioner today.