Small Businesses Demand "Tougher Approach" to Late Payment - CPA

Small Businesses Demand “Tougher Approach” to Late Payment

13th March 2018.

The Federation of Small Businesses (FSB) has demanded that the government doubles its efforts to tackle the late payment “crisis”.

Chancellor Philip Hammond delivered his spring statement this afternoon, and small businesses are pressuring him to “show leadership” on the issue of late payment. Despite various government initiatives, a recent survey conducted by the FSB found that more than four out of five businesses are still being paid late. A large majority of respondents admitted the situation was getting worse rather than better, with one in four of their bills settled late. The collapse of construction group, Carillion, shone a spotlight on the issue of late payment, pointing the finger at the exploitative relationship between big and small businesses.

Late payment is an issue that has haunted small businesses for many years, and despite various efforts by the government and other sources, it still prevails. Here at the Credit Protection Association, many of our members have suffered at the hands of late payers and many have watched their business fall as a result. Our debt recovery and credit management services act to save our members from a fall into insolvency, while also inputting safeguards to keep bad payers at bay.

Mike Cherry, chairman of the FSB, said: “The spring statement is the chancellor’s opportunity to take a stand against the corporate late payers who are withholding £18 billion from small firms across the UK.”

He said Carillion’s collapse highlighted the scale of the problem, where its debts to suppliers ran to billions of pounds. The shockwaves from the collapse are still being felt, and Mr Cherry insists the whole “sorry episode” highlights the danger of the late payment crisis.

The government appointed Paul Uppal as small business commissioner last December to support small businesses and solve disputes around payment practice. However, Uppal’s appointment, the new ‘duty to report’ legislation, and the Prompt Payment Code, all proved ineffectual and did little to stop large companies from paying late.

The FSB has, therefore, demanded a “tougher approach”, including stripping the worst offenders of the right to public sector contracts.

The spring statement was announced at 12.30pm this afternoon and as predicted, was slightly shorter than the chancellor’s budget last autumn. Nonetheless, with the future of thousands of small businesses on the line, the whole business world is hoping the chancellor will use the opportunity to give a platform to the little guy.

The Credit Protection Association has been looking out for the little guy for over 100 years and is dedicated to ensuring these small businesses survive. Late payment is not only damaging to cash flow but also an influence on business confidence, making it essential that it is dealt with as soon as possible. Our debt recovery services chase away late payers and bad payers and get the owner swiftly back in the front seat. Our credit management products ensure our members’ renewed assurance stays that way, with our credit reports and monitoring tools filtering out the bad, and leaving only the good payers and trustworthy customers behind.