In his Spring Budget in March, Chancellor Philip Hammond made many promises, one of which was his pledged assault on the “scourge” of late payments to small firms. We are now more than six months on and there has been no progress on the promised consultation. As a result, small and medium sized businesses (SMEs) are still struggling under the heavy burden of unpaid invoices and reduced cashflow.
The Federation of Small Businesses (FSB) has criticised the lack of government action on late payments, saying they are particularly concerned that the issue has not been taken seriously enough.
Mike Cherry, FSB National Chairman, said that since big businesses “aren’t doing enough” to tackle the issue, “we need to see government stepping in”.
However, new figures have revealed that the government’s small business commissioner, appointed last year to tackle late payment to small suppliers, has only investigated nine small businesses to handle complaints about late payments from larger customers.
A statement from the Credit Protection Association says: “Late payment has taken its toll on the small business community for years. While the government has launched various initiatives to extinguish the threat, all have failed to make enough of an impact.”
It also goes on to say that, whilst dismantling the country’s late payment culture may not be an easy feat, it should be a collaborative one: “To see small suppliers paid on time, late payers need to be punished and some precedent needs to be set. The government, of course, has some responsibility here, but the business community can also shoulder some of the weight.
“Small businesses need to have the confidence to come forward and report larger businesses. Their reluctance has underpinned initiatives such as the Prompt Payment Code as well as the performance of the small business commissioner.”
When it comes to cashflow, SMEs have a tight ship to run. It is therefore essential that business owners receive the specialist support and guidance they need to make effective decisions both now and for the future, as well as access to the right financial products suited to their specific business needs.
Our SME business experts at Beavis Morgan are available to structure your business with cashflow and profit forecasting to measure performance and maximise opportunities. We work to a pre-determined plan, to help you avoid any nasty surprises.
Through our partner businesses, BM Structured Finance and BM Advisory, we are also able to help with sourcing and restructuring debt finance for SME businesses, as well as assisting with resolving issues which can impact on business performance and success, and finding innovative solutions for businesses and individuals in distress.