No more taking advantage of small businesses

Sometimes invoices for small amounts are paid late.

It’s annoying, frustrating, and unhelpful, but the founders I speak to are understanding and resilient. Mistakes happen, and they chase it.

However, it is a different story when a business is talking about the big, business-critical, regular and hard-won contracts.

I have spoken to businesses who have worked for years to secure the contract of their dreams – the one that has the potential to transform their business and take it to the next level – but the invoice is not paid on time.

I have worked with businesses that had a regular, reliable client whose attitude to payment changed overnight, leaving them chasing invoices every month.

That’s not just frustrating. It’s a waste of time.

The true cost of chasing

Research has shown that businesses on average spend 86 hours a year chasing late payments. This adds up to 133 million hours of staff time across the economy each year.

Imagine what your business could do if you got these hours back.

“But I don’t want to upset the client”

Some businesses come to the end of their tether before reaching out to my team at the Office of the Small Business Commissioner. And we are happy to support them to get the money they are owed.

But others don’t want to do this because the client relationship is too important to them. They fear that by reporting the non-payment to us, the other business will be annoyed, and that will impact their working relationship.

We work sensitively and professionally with all the businesses who come to us and do our best to support the business relationship, but I do understand the concern.

In business, relationships are everything. But poor payers shouldn’t get away with it.

What’s changing?

This is why I am pleased that the rules around payments are changing. Alongside other powers, the Commercial Payments Bill will allow us to act on anonymous reports of poor payment practices.

The Small Business Commissioner will be able to investigate, adjudicate disputes, and take enforcement action. This will include fining businesses that are poor payers, hitting them in the pocket.

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This content is contributed by a guest author. Startups.co.uk / MVF does not endorse or take responsibility for any views, advice, analysis or claims made within this post.