The U.K. took several steps in 2017 to address the issue of late payments that large corporations make to their small and medium-sized business (SMB) suppliers.
Most recently, in December, the nation launched an online complaint service through which suppliers can file complaints about late payers. But the U.K.’s Federation of Small Businesses (FSB) wants the government to go further.
Reports in Enterprise Times said Mike Cherry, chairman of the FSB, published a New Years message calling on regulators to deal with the problem of late B2B payments in the country. Specifically, Cherry said, the newly appointed Small Business Commissioner, Paul Uppal, must take up the issue of what he described as “supply chain bullying.”
“This is a crunch year for the Commissioner and his team to make a real difference to firms impacted by the huge £18 billion [$23.3 billion USD] held up in poor and late payments,” Cherry stated.
In addition to the appointment of Uppal and the launch of the online complaint filing service, the U.K. also introduced “Duty to Report” rules in late 2016, led by Small Business Minister Margot James.
Research released by the U.K.’s Prompt Payment Director last May found nearly one-fifth of SMBs said they were on the brink of bankruptcy or liquidation as a result of late payments, while 42 percent said they had been forced to take out a loan because of cash flow challenges resulting from delayed payments. More than one-fifth said late payments caused them to struggle with mortgage or rent payments, and more than one-third of entrepreneurs said they had foregone their own salaries to cover cash flow crunches.
“It’s now more important than ever that the huge economic contribution made by the now 5.7 million small businesses and self-employed is recognized and small firms are put at the heart of decision-making,” Cherry said.
He also identified other key challenges to small businesses in the U.K., including the closure of bank branches, tax law and poor broadband services.
The publication noted that Cherry made no mention of incoming General Data Protection Rules (GDPR), however. Late last year, the nation launched a helpline to aid small businesses in their compliance efforts to the new rules.