PUBLISHED: 12:56 20 November 2018 Sarah Chambers Late payments cause small businesses stress Picture: SARAH CHAMBERS Archant East Anglian politicians, accountants and business leaders are calling for a clampdown on late payments which put smaller firms at risk as the government looks at what measures can be taken to ease their pain. Ipswich MP Sandy Martin fears over impact of late payments on small firms Picture: ARCHANTOrganisations in Suffolk and Essex are backing a national campaign aimed at beefing up rules around the longstanding issue, which can have catastrophic effects with some firms’ cashflow put under severe pressure.The Association of Accounting Technicians (AAT) says tens of thousands of small businesses collapse every year because of late payments and many more cannot invest, grow or employ more staff because they haven’t received money owed. It wants the Prompt Payment Code to be made compulsory for companies with more than 250 … [Read more...] about Calls for tougher stance on late payments as small businesses count the cost
Small business commissioner
Late payments are a major problem for small businesses. Olivier Le Moal Cashflow is king – it’s a warning every business knows, and yet late payment is a damaging problem the majority of businesses have come up against. But new recommendations from the Association of Accounting Technicians (AAT), backed by leading backbenchers in a cross-party pressure group, are hoping to change that. The AAT has recommended that the currently voluntary Prompt Payment Code be made compulsory to all businesses over 250 staff. The code, administered by the Institute of Credit Management, aims to increase the amount of suppliers paid on time and promote good practise.The AAT also suggests that the current legal payment terms should be halved from a maximum of 60 days to 30 days, and that a financial penalty scheme be put in place to apprehend consistently late payers, enforced by the Small Business Commissioner.Andrew Mower, the Federation of Small Business’ development manager in … [Read more...] about Cashflow is King, but how do small businesses stay on its right side?
The small business commissioner is travelling to Middlesbrough as part of a crack-down on the late payment culture that is hitting thousands of businesses. Paul Uppal is travelling to the North East on September 4 to take part in a Q&A session with local businesses at the STEM Centre in Middlesbrough. His visit aims to highlight how he is addressing the late payment culture, which costs small firms £2.5bn a year, and how his office can support firms during disputes over outstanding invoices. Mr Uppal said: “The North East and Tees Valley regions are home to a vibrant cluster of small businesses and I am looking forward to hearing their inspiring stories and the challenges they are facing to drive forward their enterprises. “Through my role I aim to give small businesses the support they deserve, in particular to ensure fair payment practices, which are essential in helping them to thrive.” The devastating effect late payments can have on small businesses … [Read more...] about Late payments culture under fire as small business commissioner comes to Teesside
It’s fair to say that Carillion’s “relentless dash for cash” and “exploitation of suppliers” have left a cloud over British business, and now the fall-out must force a change in the way future supply chains are managed. For a long time now, thousands of Small and Medium Sized Businesses (SMEs) in the construction supply chain have faced a Hobson’s choice in working with large contractors. For many it is simply put up and shut up, or risk losing work. In fact, our research found that over half (56 per cent) of subcontractors feel they’re unable to influence or negotiate contracts at the risk of losing business. Read more: The Carillion collapse was a failure of governance at every level Summarising the problem in a House of Commons Select Committee in April, Small Business Commissioner, Paul Uppal explained that many businesses would “rather have a very, very bad commercial relationship than none at all.” Subcontractors … [Read more...] about Lessons to learn from the collapse of Carillion go beyond financial accounting and into how small businesses can be nurtured
Half of small businesses in the UK are currently operating in the red, according to the latest Small Business Insights index. Data from 250,000 SMEs showed that only 49.5 per cent of businesses were operating in positive cash flow last year. The UK's biggest firms were also found to be paying SMEs late, as on average 30-day invoices were paid after 42 days. The study put together by Xero said that late payments was putting a serious cash squeeze on smaller businesses. Read more: Small businesses to be hit hardest by pension contribution increase Vicky Pryce, economist and previous director general for economics at the department for business, innovation and skills, commented: "The impact of late payments on the economy cannot be exaggerated. Work done by the European Commission looking at both business to business and government to business payments found that late payments were directly associated with worsening firms’ cash flow positions, and particularly for smaller firms." … [Read more...] about Half of the UK’s small businesses are operating in the red