According to SME finance provider Funding Options the Small Business Commissioner has recovered £3.4m of late payments for 91 small businesses, £3.1m of this in the last six months.
The position of Small Business Commissioner was launched by the UK government in December 2017 to help small companies resolve payment disputes with larger companies. The current small business commissioner is minister for parliament Paul Uppal.
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Conrad Ford, chief executive officer of Funding Options, said: “The Small Business Commissioner is finally hitting its stride. That’s shown by the number of businesses it has now helped and the money it has recovered.”
“A gap in cashflow sometimes means small businesses, who rely on timely payment from clients, are forced to forego investment in the growth of the business. Larger companies certainly have the means to pay on time, so it’s a straightforward issue that can be avoided.”
According to a statement released by Funding Options: “There had been concerns that small businesses would be reluctant to complain to the Small Business Commissioner about larger clients for fear of losing custom. However, the progress that the commissioner is making should encourage other small businesses to come forward. Huge cashflow problems can arise for a small business from just one major client not paying an invoice on time, in extreme circumstances causing insolvency.
In the Spring Statement before UK parliament, Chancellor Philip Hammond announced “definitive action to tackle the scourge of late payments for our small businesses.”
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By GlobalDataThis includes the requirement of company audit committees to review payment practices, to be reported on in the annual accounts. Hammond also deferred to business secretary Greg Clark to announce “further details in due course.” Hammond also gave thanks to the Federation of Small Businesses (FSB) for their campaigning on this issue.
Research from business finance company Market Invoice has shown that around half of all invoices for creative industries were paid late in 2018.
