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Small Business Commissioner highlights late payment support

The independent Small Business Commissioner is offering vital free support to help small businesses suffering from late payments, which have increased significantly during the COVID-19 crisis.

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The independent Small Business Commissioner is offering vital free support to help small businesses suffering from late payments, which have increased significantly during the COVID-19 crisis.

Established in 2017, the Small Business Commissioner (SBC) is an independent body set up by government to tackle late payment practices and ‘supply chain bullying’. More than half of small businesses report experiencing overdue payments, with total late payment debt in the UK standing at £23.4 billion before the outbreak of COVID-19.

The SBC provides free advice and guidance for affected companies, including recommendations on how parties should resolve disputes. Caseworkers have dealt with nearly 70 complaints and enquiries from the industrial manufacturing sector to date, helping manufacturers to unlock £3 million of late paid invoices.

In July, Interim Small Business Commissioner, Philip King, held a webinar with UK Growth Hubs to highlight the importance of the SBC’s services during the current crisis. He warned that the impact of COVID-19 on late payments had been “significant”, was risking not only the financial survival of small companies but also people’s wellbeing and mental health, and that he had been writing to large businesses to free up payments.

Geoff Crossley, Senior Manufacturing Advisor at GC Business Growth Hub, said:

“We’ve heard many reports during the pandemic where companies have changed their payment terms, sometimes up to 180 days. In some industries like garment manufacturing, which has been in the news recently, orders in process have been held indefinitely or cancelled altogether, leaving suppliers in the lurch. This then puts pressure on their ability to pay others, causing a domino effect that hurts everyone.

“The difficulty for a small business lies in deciding whether or not to take action for non-payment against a key customer who they want to maintain a good relationship with. There are usually ways to solve the problem collaboratively rather than confrontationally, and it’s great to hear that the Small Business Commissioner is taking these issues up and helping to resolve disputes when debtors aren’t listening.

“I recommend that any manufacturer with significant outstanding invoices to get in touch with us and also access the SBC’s free service to see what they can do for you.”

Businesses are also being encouraged to sign up to the Prompt Payment Code (PPC), a voluntary code of practice administered by the SBC that requires signatories to pay 95 per cent of their invoices within 60 days.

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