Business Secretary Grant Shapps has announced a comprehensive review into tackling late payments for small businesses, while urging large companies to pay their smaller suppliers promptly.
Small businesses routinely spend significant time and resources chasing late payments from businesses they supply which can lead to cash flow problems, putting their firms at risk and preventing them from growing. The majority of small businesses do not have large balance sheets and cannot accommodate long payment terms or delays to receiving payment within their cash flow cycle.
The Payment and Cash Flow review will scrutinise existing payment practices and the measures in place to make sure small firms are not ripped off by their larger clients – with over £23.4 billion currently owed in outstanding invoices to UK businesses.
The review will consider the progress made in specific sectors of the economy in combatting late payment and will also include an in-depth examination of current payment reporting regulations and the Prompt Payment Code.
In addition, the statutory review of the Small Business Commissioner will help to ensure that the UK has the right arrangements in place to best support small businesses.