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Small Business Commissioner Still “Tackling” Late Payment

Paul Uppal, the man with the unenviable task of tackling Britain’s chronic habit of paying its dues late, insists the battle against late payment is still at play.

Much criticism has been levied at the new small business commissioner, Paul Uppal, who has been faced with the exasperating task of resolving the scourge of late payment. His reluctance to punish late payers with penalties has been challenged, as many small businesses are too intimidated to come forward themselves and rely on louder voices to speak on their behalf.

Mr Uppal has spoken to the The Times on his progress, and admits that he understands the timidity of small businesses and believes he wouldn’t have had the confidence to approach a government body himself and would have tried to “sort it out himself”.

This seems to be the popular opinion, with many small business owners preferring to deal with credit control issues themselves. A recent report from the Federation of Small Businesses found that late payment forces about 50,000 businesses to the wall every year and costs the economy billions of pounds. Nonetheless, according to the FSB, the commissioner’s office has received little more than ten complaints a month since it launched a dispute-handling role in December. This is far lower than should be expected considering the financial distress that is befalling so many businesses each year.

The small business commissioner insists that while he has made little dramatic progress, there has been much “conversation” with important people and that he now better understands the problem. Of course, whether there will be a resolution to this problem, remains to be seen.

In the meantime, businesses should resist resting the problem solely on their own shoulders. Third party credit management and debt recovery companies are there to help in such times and have the expertise to ensure a quick and positive solution. At the Credit Protection Association, we utilise our industry knowledge to not only award our Members with a renewed financial confidence, but also a greater awareness of how to handle finances in the long term.

Observers including the Specialist Engineering Contractors group, which represent tens of thousands of small businesses in the construction industry, think the commissioner must be given powers including the ability to fine. Mr Uppal insists he is “agnostic” about that and says the role can play its part in effecting a cultural change.

“We will name and shame offenders and we will highlight good practice as well,” he says. “I want to keep the spotlight on late payment because it’s the right thing to do, but there’s an economic win for the UK too.” He does not want to be seen to be lobbying for more ammunition, but he does not disagree with those who say the commissioner should be given teeth, including the ability to demand information from big businesses suspected of poor payment practices.

Paul Uppal, has discussed the ineffectual Prompt Payment Code, where failed construction giant, Carillion, was signatory. “The code should be overhauled. the small business commissioner said.

“I say let’s have a prompt payment code that’s properly policed, has teeth. Let’s start again.”

Mr Uppal says the construction industry, which he has worked in, is particularly prone to mistreating suppliers.

“People are frustrated because [late payment] is a longstanding cultural problem we have with business in the UK, it’s very short-term and people are making a quick buck. We need long-term solutions.”

Mr Uppal spoke up against retention payments within the construction industry, under which a portion of the contractor's wage is held back as an incentive for repair work. “Some funds that are ringfenced to make sure the job is done correctly is fine,” says Mr Uppal. “What you do not want to see is people taking advantage of that for the most spurious of reasons. We know that is going on.” He adds: “It is a rough, rough trade. There’s actually an interest to put smaller guys out of business so you don’t have to pay them.

Late payment has proven itself to be a difficult stain to remove. Despite the small business commissioner’s good intentions, late payment continues its torment and small businesses are suffering as a result. A tougher approach is necessary if a cultural shift is to be inspired, particularly if late payment victims continue to be too intimidated to step forward themselves. However, the government remains “agnostic” towards fining and penalising its most lucrative businesses, so suppliers may have to look elsewhere for assistance.

If the government cannot provide adequate protection to the financially distressed business owner, this does not mean they are on their own. Credit management, debt recovery and debt collection companies remain important providers of financial help and advice, and businesses should utilise their services to not only plug holes in cash flow but improve their finances for the better.

At the Credit Protection Association, our debt recovery services free up cash flow by chasing down unpaid invoices and recovering any residual debt. This affords our Members some financial freedom to pursue expansion and growth opportunities, and repair the damage inflicted by late payment. Furthermore, our credit management products conduct thorough credit checks and status reports on the customers of our Members, ensuring that no individual or company will cause future problems and drive them back into distress.

Late payment has driven many businesses into financial straits and even insolvency, but there are ways to improve circumstances and shift finances over to the better.

Here at CPA, we fight to the tooth for our members, particularly those who have suffered through late payment and bad payment practices. We recently created a new department within our company dedicated to getting our members rightly compensated in accordance with the Late Payment of Commerical Debts (Interest) Act 1998. This has unlocked hidden cash and potential for our members and brightened their prospects and confidence on the construction site.