Carillion Crisis Could Finally Drive Away Late Payment

30th January 2018.

Small business commissioner, Paul Uppal, has spoken out against late payers, and is prepared to enforce legislation to pressure big companies to pay suppliers on time. The Carillion crisis shone a spotlight on the issue as the construction giant delayed payment to their suppliers by as much as 120 days. Late payment has been a blight on UK businesses for years and Mr Uppal acknowledges that a complete culture change will be needed to influence prompt payment. Here at the Credit Protection Association, the majority of our members are crippled by late payers, and while we will do all we can to get those invoices paid, we know our members would prefer for it to not happen at all. Staunch legislation enforced by the small business commissioner would stop late payers in their tracks and force them to finally pay on the supplier’s terms, rather than their own.

Late payment is one of the biggest challenges facing businesses, with up to 50,000 failing each year because they are owed money by other companies, Mr Uppal says in an interview at his Birmingham office.

“Payment is getting later and it is becoming more widespread [and that is unacceptable].”

Mr Uppal, who began his job in October, says he will be a “champion” for small companies. “Big business has got a voice and is good at getting in front of government”.

The small business commissioner has invited large companies to discuss a deal to drive away late payment. “This has to be a collaborative approach. I want large businesses to feel they can approach me and give their perspective. The door is open,” said Mr Uppal.

Mr Uppal also wanted to tackle “supply chain bullying” — the practice of big retailers forcing suppliers to give discounts on stock, then penalising them for minor infringements.

Small traders are “reluctant to put their head above the parapet” and use complaint mechanisms because they fear losing contracts, he adds.

For now, Mr Uppal is operating on a shoestring, with an annual budget of £1.4m guaranteed only until April and just three staff, though he is expecting it to expand to 20 within months.

He vows to speak up for SMEs on many issues as “politicians have really got to deliver” and “Small businesses do feel unloved at the moment.”

Late payment has long been seen as a small business problem, however, since the Carillion crisis, it has become everyone’s problem. It is estimated that around 30,000 firms are still expected to fail as a result of the collapse. Mr Paul Uppal is determined to drive away late payment, whether it’s through peaceful collaboration with big companies, or whether it’s forced through legislation. Small companies have finally been given a voice and it’s because of a liquidated construction giant that everyone is finally listening.

Here at the Credit Protection Association, we have dealt with the fallout of late payers, non-payers and bad payers, and we’re glad to see its demise is finally in the works. While CPA cannot force late payers to pay on time, we can advise business owners on how to avoid them altogether. We offer various credit management products, including monitoring and credit reporting systems, which will allow you to keep an eye on all your customers. If you see a new customer has a history of late payment or a low credit score, you can now cut association early. We also, of course, offer debt management services to rid your cash flow of bad debt and bad payers. Get in touch with our team with the details below!