UK Goes After Late B2B Payments — Again

U.K. regulators have taken notice of the nation’s late B2B payments problem and have encouraged businesses to pay their small suppliers on-time — though with limited success. Reports Monday (Dec. 12) said authorities are taking another hit at the issue.

Small Business Minister Margot James recently revealed new “Duty to Report” rules aimed at boosting transparency in the payments process from large corporations to small firms.

“Unfair payment practices and unnecessary red tape hamper [SMEs’] ability to grow and have no place in an economy that works for all,” James stated. “By shining a light on how large businesses pay their smaller suppliers, we want to empower small businesses and drive real change in payment culture.”

Starting April 2017, large corporations and limited liability partnerships will have to provide details on their payment terms with suppliers, including the average time it takes them to pay suppliers. The details must be submitted twice a year, according to reports.

It is unclear, however, how the new rule will be enforced, if at all.

Still, the move seems to have support within the small business community.

“Tackling late payments is now a key part of the government’s corporate governance agenda,” stated Federation of Small Business National Chairman Mike Cherry in another statement. “The comprehensive and regular Duty to Report is the first step to combat a business culture that feels like one where it is OK to pay small firms late.”

“It is not OK,” he continued. “We estimate that 50,000 business deaths could be avoided every year if only payments were made promptly.”

Philip King, chief executive of the Chartered Institute of Credit Management, meanwhile, released another statement in support of the new rules.

“The new Duty to Report will lead to much greater transparency and is clearly one of a suite of measures to improve payment practices, including the Prompt Payment Code, the appointment of a new Small Business Commissioner and, first and foremost, best-practice credit management,” King stated.