New PM should walk the walk and back small firms over late payments

2oth August 2019.

Small Business Commissioner, Paul Uppal

The small business commissioner has called on Boris Johnson to prove his business credentials by giving small businesses greater support over late and delayed payments.

This follows calls earlier this month from the institute of chartered accountants

Last week  Paul Uppal called on the Prime Minister, Boris Johnson to “walk the walk” and back small businesses against the crippling impact of late payments from bigger firms.

Paul Uppal said Mr Johnson needs to cast aside previous negative rhetoric about business and justify previous claims that small firms are the “backbone of the British economy” through policy.

Mr Uppal appealed to the Prime Minister with the warning that small firms need greater support from government over late and delayed payments.

Business groups have warned of a rise in longer and delayed payments in recent years, but Mr Uppal said that pressure from business-owners and customers have made it inevitable that the situation will improve.

Both Mr Uppal and the Chartered Institute of Credit Management (CICM), which operates the Prompt Payment Code on behalf of the Government, have increased scrutiny on poor payment practices in recent months.

The last two quarters have seen the Prompt payment code publicly shame bad offenders

Large UK firms such BT, BAE Systems and Holland & Barrett have been singled out over their poor payment practices by the watchdogs over the past year.

Mr Uppal said: “The issue of late and delayed payment isn’t going away. We need to continue to shine a light on this issue, but now we have received a great response, and people won’t let this issue get forgotten about.

“My message to the Prime Minister is that small businesses have heard themselves be described as the backbone of the economy, so I want him to walk the walk and ensure they are supported.”

What is the code? – The Prompt payment code

The Voluntary Code is administered by the CICM on behalf of the Department for Business, Energy and Industrial Strategy (BEIS). Signatories pledge to uphold its best practice for payment standards to end the culture of late payment.

1. Pay suppliers on time

Within the terms agreed at the outset of the contract

Without attempting to change payment terms retrospectively

Without changing practice on length of payment for smaller companies on unreasonable grounds

2. Give clear guidance to suppliers

By providing suppliers with clear and easily accessible guidance on payment procedures

By ensuring there is a system for dealing with complaints and disputes which is communicated to suppliers

By advising them promptly if there is any reason why an invoice will not be paid to the agreed terms

3. Encourage good practice

By requesting that lead suppliers encourage adoption of the code throughout their own supply chains

visit the prompt payment code site

Visit the website and become a supporter to show your support for late payment legislation.

Philip King, the chairman of the CICM

Philip King, the chairman of the CICM which currently operates the code, said he thinks it is likely that government will place it under the small business commissioner’s responsibilities at the end of the review.

He said: “The consultation is currently taking place, and I think it will work to the benefit of small businesses.

“I believe the Government is taking this issue more seriously than they were before, which will only help to improve the behaviour of large firms more widely”

It’s time we crack down on the late payment culture

Liza Minnelli sang in the musical Cabaret “Money makes the world go round’. late payment however are a bit like poking a stick into the spokes and making the world grind to a halt.

Most small businesses that trade on credit have experienced such a shock when their cash flow has been choked by late payments.

Suddenly they are struggling to pay their suppliers, pay their employees or invest in their business.

Rather than moving on to bigger and better things, they are suddenly grasping and flailing as they try to keep the business afloat.

I can’t help but imagine a swimmer who was at one moment swimming confidently along in the sea but then suddenly gets caught off guard in the wake of rude, inconsiderate motor boat user and has a lung full of water and is struggling to recover.

Late and bad payers leave a string of struggling businesses in their wake.

The latest Business Confidence Monitor, released this month by the Institute of Chartered Accountants in England and Wales (ICAEW), revealed stark picture of late payments are on the rise.

According to the research, one in five businesses report late payments from customers as presenting a greater challenge than they did a year ago and late payments represent one of the main challenges flagged up.

This is a problem across the board for business, but of the nine sectors examined by the ICAEW, six of them are seeing late payment as a growing issue.

The sectors are property, business services, manufacturing and engineering, construction, retail and wholesale and banking, finance and insurance.

Thats a very big chunk of the economy and should send very worrying signals to everyone in business – and those in Westminster.

Time for action

It really is time for action on late payments, the late payment culture is growing and expanding and starting to choke the UK economy.

Talk to SME owners across the spectrum of industries, and they will tell you it is something that needs to be addressed.

The main culprits are, of course, big businesses and large corporations who are abusing the system and are skilled at twisting and turning their way out of making prompt payments. However a large amount of late payments are also from fellow SMES.

But what can be done about it? Well, a lot more than what’s happening now.

In a previous blog we wrote about the new government proposals to tackle late payments and bolster the Prompt Payment code.

You can see the Governments full document here : Creating a responsible payment culture: a call for evidence in tackling late payment: government response

Back in April 2017, legislation was introduced requiring all large businesses to publish their payment practices and later that year the government created the role of the Small Business Commissioner, specifically to ensure fair payment practices for SMEs and help them resolve disputes with larger companies.

A study of the data from around 7,000 companies, undertaken by the Small Business Commissioner and Lloyds Bank, published in January this year, showed that 65% of large businesses had an average bill payment time of more than 30 days. With more than a fifth taking more than 50 days or more to pay invoices.

The Small Business Commissioner and the Prompt Payment Code have also this year started to ‘name and shame’ late paying large firms.

Has this made big business change their ways?

If the ICAW report is anything to go by, it appears not.  Naming and shaming isn’t working

The only answer is  to really hit large businesses where it hurts; the wallet.

Its time to forget about the carrot approach and try the stick.

The Government is consulting over whether the Small Business Commissioner can be given the powers to fine late paying large companies.

But where will the fines go?

Not to the SMEs affected.

CPA suggests SMEs use the existing late payment legislation to get compensation retrospectively from late paying businesses.

CPA (established in 1914) offers a unique service that identifies, calculates and recovers compensation for clients who have been paid late by their business customers.

Claiming only from ex-customers, that may never be supplied again, tens of thousands of pounds of bottom-line profit may be generated without the necessity of a single extra sale with no financial outlay whatsoever after the claim has commenced.

For an estimate of what you may expect to receive, simply request a brief phone call from us or call 020 8846 0000. You have everything to gain nothing and nothing to lose!!!

You can read more about it in some of our blogs

Read our blog here on how to crack down on the late payment culture.

Read our blog here on how to give late payers the slap they need.

See our full blog and FAQ on late payment compensation

Late payments are a blight on UK business that continues to spread like cancer across the business community. If we don’t cut it out, it will have a catastrophic effect on SME businesses which are the backbone of Britain and its economy.

Do you sell on credit?

With pressures on the cash flow it is essential that you stay on top of the credit limits you grant customers and watch carefully for any late payments.

Those customers will look for the easiest option  to boost their cash-flow. Don’t let it be you.

You can’t just assume your customers can and will pay you eventually, no matter how big their name is.

It is essential to have credit management systems in place to monitor and check your customers credit worthiness.

It is also best practice to use a trusted third party like CPA to make sure you are paid on time by customers, no matter how good a name they have.

About CPA

The Credit Protection Association can help!

Formed in 1914, CPA has been providing credit management services to SMEs for over 100 years.

At the Credit Protection Association, we provide first class credit information that can help you avoid being over extended to customers who are at risk. Our monitoring service can flag up warning signs long before the end, giving you the chance to adjust and reduce your exposure. We provide recommended credit limits and credit scores on a traffic light system and can help you set appropriate credit policies for your customers.

We regularly publish lists of the latest insolvencies but by then it is too late. Our credit reports however predict approximately 96% of company insolvencies long before they arrive.

Companies in trouble usually have very bad cash flow and they try to deal with it by delaying payment to their suppliers, increasing your exposure to them.

If you supply on credit, help us help you identify the risks.

Why use a third party collector?

As a third party collector, we can also get your payments prioritised over those who are not as hot on collections. When you customer receives a letter from the Credit Protection Association regarding their outstanding account, they are going to want to get that resolved as a priority. Our overdue account recovery service can get your unpaid invoices to the top of their “to do” list and get your invoice paid.

Over the years we have collected billions in overdue invoices for our customers.

Our debt recovery and credit management services give our members the financial freedom needed to grow and prosper, while our new Late Payment Compensation department could unlock hidden potential and offer the compensation needed to springboard your business to success.

The Credit Protection Association – Prompting Punctual Payments – Ethical, Effective, Efficient, Economical collections

Ready to speak to an advisor?

For help or advice on credit management, entirely without obligation.

Call us today

0330 053 9263

CPA is passionate about late payment

The Credit Protection Association has been protecting smaller firms against poor payment practices for over 100 years.

We are extremely passionate about breaking the late payment culture that holds back the UK economy and threatens many SMEs with cash flow difficulties being the single biggest killer of Britain’s small businesses.

If you were regularly paid late we can help. Those former customers used you to boost their own cashflow, regularly paying you late.

As a result you had extra costs, you had the distraction of having to chase payment, you had opportunity costs because your capital was tied up in their late invoices.

Under little used legislation, you are entitled to compensation for those late payments.

Now you can boost your own cash-flow.

CPA can help unearth the those hidden treasures.

We have the technology to reveal the compensation you are due and we have the extensive experience and expertise to then turn those claims into cash.

Yes, CPA can help you boost your business cash-flow.

Don’t let your bankers control you, contact CPA today.

The Credit Protection Association – Prompting Punctual Payments – Ethical, Effective, Efficient, Economical collections

Read our blog here on how to crack down on the late payment culture.

Read our blog here on how to give late payers the slap they need.

The “Why” of the late payment culture.

Paying late is “crack cocaine” to big business.

Late payment culture risks “spiraling out of control”

visit our late payment compensation page

See our full blog and FAQ on late payment compensation

Do you realise you could be sitting on a fortune?

Late payments often result in a cash flow crunch and leave SMEs in need of a cash injection.

If you sold B2B on credit then there may be a hidden source of capital you can call on.

If you fancy an bit of extra cash in your business, rather than jumping through hoops with your bank, you could look to uncover the resources from an unexpected source within your own business.

Not many are aware but there could be a hidden fortune within your business, sitting there, just waiting to be uncovered and released.

We can help you uncover the pile of gold, you didn’t even know you were sitting on.

If you trade with other businesses and were often paid late then you could be entitled to significant compensation.

Under little known and under-utilised legislation your business could be due huge amounts in compensation that you didn’t even know about.

Let’s be clear – this is not a way to weaken any customer relationships you value. It is one that identifies who’s been paying late and then recover the potentially significant sums in compensation using Late Payment Legislation from businesses where the relationship has already ended.

You can pick and choose who you want us to follow up – but once we’ve agreed which companies you’d like to pursue compensation from it’s a fast process and there’s no financial outlay to you whatsoever. My team at CPA put its expertise to work to recover the compensation due and fight late payment culture.

That compensation could provide the cash boost your business needed.

But don’t delay, that compensation evaporates if not claimed within six years of the late payment.

How can CPA help?

CPA has developed a unique technology to dig into your accounting records and discover the cash injection you are due by means of compensation. The software does all the hard work. Our software interacts over the cloud with over 300 different software packages, working directly with your accounts package, just so long as it’s stored on a computer.

We recognise that most companies do not have the resources to spend time on the identification and calculation of Late Payment Compensation. Our service can produce an Analyses within just a few days with (usually) less than 30 mins of co-operation from our clients. We work directly with over 300 accounting packages but can also work with bespoke accounts packages. Indeed, speed is essential as the oldest invoices may fall foul of the 6-year time limit.

Once the Sales Ledger Analyses is made available to clients, all that is required is that management decide which commercially sensitive ex-customers to remove from the list and return it to us.

CPA then uses its years of collection experience to explain and recover the Late Payment Compensation Claims. Clients do not handle any part of the recovery process as our team will take all communications from the companies against who the claims has been made. Often, it’s simply a case of explaining the legislation, sometimes we have to go all the way and enforce the legislation through the courts.

The result is that we are realising clients’ claims worth tens and sometimes hundreds of thousands of pounds which, of course, is pure net profit.  You may also be among the recipients of “hundreds of thousands of pounds” should you elect to take advantage of our services.

We do the work, you receive the cash.

If you have supplied goods and services to businesses on credit and were regularly paid late then you could be due significant sums in late payment compensation.

We are talking to companies and unearthing claims in the hundreds of thousands from former business customers who paid them late. Large business customers who abused their power to inflict unfair and sometimes illegal payment practices.

We are helping business owners  who are looking to boost the returns from their business before they retire. We are helping businesses who have lost major clients after years of loyal service to get properly compensated for systematic late payment. We are helping companies that were looking to close down, who looked insolvent and finding that cash injection they need to avoid insolvency.

Those former clients who regularly paid you late can finally be made to pay.

Ready to speak to an advisor?

For help or advice on credit management, entirely without obligation.

Call us today

0330 053 9263

The Credit Protection Association is a credit management company established in 1914. If you supply goods or services on credit then we can help you!

The Credit Protection Association – Prompting Punctual Payments – Ethical, Effective, Efficient, Economical collections

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