Home Economy Late payments move up the Government’s list of priorities
Meanwhile, the Forum of Private Business is lobbying for two new measures to address the issue and says the problem is largely down to small businesses failing to invoice correctly and being clear on their terms of payment
The new Department for Business, Energy and Industrial Strategy (BEIS), which was created by Theresa May in 2016 following her appointment as Prime Minister, has announced that late payment of small business invoices is to become a primary focus of the Minister for Business.
But the Forum of Private Business claims that issuing guidance to large businesses on how to pay on time is likely unnecessary as many of them already know the procedure and simply fail to follow it.
Instead, it claims that having to disclose practices six-monthly will make sure those who do fail risk having their names made public.
The ‘Hall of Shame’ currently run by the Forum highlights those large businesses that are forcing unreasonable terms of trade, as well as late payment practices, on small businesses.
Following the example of Government, the Forum will now be publishing this six monthly, spotlighting those businesses that are bullying small businesses on commercial terms, and encourage small businesses to inform them of situations they see as unfair.
As well as shaming late payers, the Forum is lobbying for a further measure: providing clear guidance for the actual small businesses suffering at the hands of the late payers.
It sees the real issue of late payment as too often stemming from the small businesses themselves – failing to issue invoices properly and failing to be clear on their terms of payment.
Chief executive of the Forum of Private Business Ian Cass said: “What we really need is clear guidance for small businesses as much as for large businesses. Many small businesses for instance fail to quote purchase order and reference numbers, they fail to quote their payment terms and they fail to add late payment interest clauses. The Forum issues its Credit Control guide to help with these issues.
“We will be working to support the Small Business Commissioner, when their long awaited appointment is confirmed, to focus on this aspect, and also will be pressing for a simple route to claim both payment and penalties without the need for expensive court procedures.
“Additionally we would like the Commissioner to be given powers to act against big business, beyond finger wagging letters, when they do not respect the published guidelines, and we will be lobbying hard on this issue. Late payment is one of the biggest headaches for small businesses and they need all the support they can get in resolving it.”