New measures being planned to ensure SMEs are paid on time
The government is planning to ease the cash flow burden on small firms by making the boards of large companies accountable for late payments to suppliers.
It is part of an ongoing effort to tackle the issue of late payment, which can be the difference between success and failure for many SMEs.
Large companies could also face fines and have binding payment plans enforced on them under new proposals from Small Business Minister Kelly Tolhurst.
It is hoped this will increase transparency and accountability for late payments. Measures will also force audit committees to report payment practices in company annual reports.
The Small Business Commissioner could also be given more powers such as compelling information and disclosure of payment terms and practices, and imposing financial penalties or binding payment plans on large businesses found to have unfair payment practices.
The Small Business Commissioner will also take responsibility for the Prompt Payment Code. This will mean all methods of tackling late payment are assigned to one organisation.
Ms Tolhurst said: “The vast majority of businesses pay their bills on time, with the amount owed in late payments halved over the last five years. But as a former small business owner, I know the huge impact a late payment can have on the ability of a small business to plan, invest and grow.
“These measures will ensure that small businesses are given the support they need and ensure that they get paid quickly - ending the unacceptable culture of late payment.”
Please contact Neil O'Callaghan if you would like help with credit control and debt collection.