B2B Payments

Small Biz Group Presses UK To Do More On Late Payments

Shutterstock

The Federation of Small Businesses (FSB) said the U.K. government’s latest efforts to combat late B2B payments to small suppliers fell short of what’s necessary.

Reports Friday (Oct. 14) said FSB National Chairman Mike Cherry is raising concerns that there is insufficient attention paid to the issue of late payments. His remarks follow the government’s publication of how the SME commissioner should tackle the matter, a proposal Cherry said doesn’t go far enough.

“Progress to tackle the U.K.’s poor payment culture has been too slow,” he said. “Today’s announcement of the next step for the small business commissioner is necessary but not sufficient to tackle the £26.8 billion [$32.6 billion] currently held up and not paid to small suppliers.”

According to reports, the FSB is slated to release its own report on the issue. Cherry said the report will reveal that “about a third of payments to small businesses in the U.K. are still late, with an average delay of one month.”

“This hampers smaller businesses who struggle with their cash flow but also prevents the whole U.K. economy working efficiently,” he added.

The government’s small business commissioner consultation was announced last week, calling for submissions on how the commissioner should perform required duties, including tackling late payments. The consultation was set forth by the Department for Business, Energy and Industrial Strategy, according to reports.

While the FSB welcomed the initiative, with Cherry describing it as “an important step” and one that builds “on the transparency reporting requirements brought in by the last administration,” he added that the SME commissioner must be forceful in any activities intended to reduce the frequency of late B2B payments.

“The new commissioner must have the confidence and respect of the entire business community and the strength to take on large businesses where necessary,” he said in his statement. “However, real success will depend on a top-level approach by the government to tackle late payment.”

“Prime Minister Theresa May’s corporate governance agenda must prioritize the problem of poor supply chain practice, which is currently occurring across the U.K. economy’s payment culture,” he concluded.

The position of SME commissioner was created under the Enterprise Act and announced last year, but it wasn’t until this year that the government could fill the role and the official could enforce the rules laid out by the Enterprise Act.

——————————–

Latest Insights: 

The Payments 2022 Study: Building A High-Performance Payments Team For Fraud Detection, a PYMNTS collaboration with Stripe, examines how digital platforms of all sectors and sizes plan to develop their anti-fraud teams as part of their their broader growth and development strategies. Drawing from an extensive survey from approximately 250 payments heads at digital platforms in the U.S. and abroad, our study analyzes how poor anti-fraud capabilities can harm platforms’ long-term growth strategies, and how they can build high-performing teams to tackle these challenges.

Click to comment

TRENDING RIGHT NOW

To Top