Attire Accessories - Seo/Oct 2019 (Issue 78)

FSB BUSINESS FEATURE 77 LATE PAYMENTS Dave Stallon, commercial director at the Federation of Small Businesses (FSB), looks at the effects late payments have on businesses The scourge of late payments, affecting small businesses across the UK, is nothing short of a scandal. Supply chain bullying and the shoddy payment practices used by some bigger firms towards their smaller suppliers and contractors is unacceptable. Often, small business owners have found themselves over a barrel – unable to walk away from bigger clients, even if those big businesses are treating them appallingly. Late payments cause uncertainty and financial hardship to those on the wrong end of them. When someone has completed work and is owed money, there is no excuse for keeping business owners waiting three or four months. If you’re not sure when – or indeed if – you’re getting paid, that can cause a lot of stress for a business owner and their employees, along with their families. There’s also the time and effort spent chasing payment when they should be running their own business. For smaller businesses or the self-employed without their own finance team, this can be even more harmful. Then there’s the economic impact. These poor practices prevent businesses growing. They can force small business owners to seek emergency loans and, as in 50,000 cases a year, can lead to the closure of a small business. The average value of a late payment owed to a small business is £6,142, and we estimate that eradicating the issue could grow the UK economy by £2.5 billion. Incredibly, 84 per cent of our members have told us that they have been paid late, and more than a third have run into cash flow problems because of late payments. With such a huge, crippling impact on small businesses, it’s clear something needs to be done to halt this epidemic plaguing these firms. NAME AND SHAME At the Federation of Small Businesses, we have long campaigned to end the blight of late and poor payment practices. Last year we launched our Fair Pay, Fair Play campaign. The campaign’s three-point plan sent out a clear message that paying late and supply chain bullying are not OK. We wanted to see large businesses made to assign non- executive directors who would have the responsibility to prevent late payment. We called for payment enforcement to be strengthened by the government, allowing them to fine companies that fail to provide, or provide incomplete Duty to Report on payment practices data. We also campaigned to see the government become a best-in-class client public procurement itself, with no public contracts being awarded to persistent late payers. This is