The Small Business Commissioner will have the power to investigate and publish reports on late payments based on anonymous tip-offs.
New powers are to be introduced along with a raft of other measures laid out in the upcoming Prompt Payment & Cash Flow Review. Other such measures include:
- Extending payment performance reporting obligations – there will be new metrics for reporting, including a value metric, so businesses and commentators can see the value of metrics
- Providing greater advice for small businesses on negotiating payment terms that better suit their needs
- Closer integration of the Small Business Commissioner with other late payment functions
- Strengthening the Prompt Payment Code so that signatories must reaffirm their commitment every two years to stay on it
The aim of the measures is to create a stronger payment culture while giving small businesses a more stable and reliable cash flow. All in all, it should mean less time chasing payments for small business and more time to put into growth.
The Prompt Payment & Cash Flow Review is ‘due to be published shortly’, according to the government.
In 2022, SMEs were owed an average of £22,000 in late payments and many don’t have the time or resource to deal with them. Tackling late payments could also boost the economy by £2.5bn annually.
Small Business Minister, Kevin Hollinrake, said: “Small businesses form a crucial part of large companies’ supply chains. Without them, they couldn’t do business. It’s only right that they should be paid promptly for their services.
“SMEs that are paid on time can do more business, scale up and make more profits, delivering growth for the economy.”
Late payments watchdog collects less than £1m in past two years – Office of the Small Business Commissoner claws back just £800,000 in late payments since new commissioner took over, saying sums involved are getting smaller
Small businesses spend hour and a half each day chasing late payments – UK SMEs are owed more than £50bn of late payments between them as big companies put off settling invoices
How to tackle late payments to your small business – Late payments cost small business owners £6.7bn a year just chasing overdue invoices. Antti-Jussi Suominen offers solutions as to how to handle late payments