Late payments significantly impact small businesses, averaging £22,000 in losses annually. In response, the UK government has launched a consultation to devise stringent laws holding larger companies accountable.
The proposed measures aim to enforce transparency in payment practices, requiring large firms to disclose payment data in their annual reports. Past efforts, like the 2017 “duty to report” legislation, have seen limited success.
Research by the Chartered Institute of Procurement & Supply has revealed a persistent issue with late payments. Despite legislative efforts, improvements in payment behaviours of large companies have been minimal.
Business Secretary Jonathan Reynolds echoed the sentiment, describing late payments as “simply unacceptable.” He emphasised holding larger firms accountable for their payment practices.
A fair payment code will be introduced, awarding businesses gold, silver, or bronze status based on their payment standards. This ranking system aims to encourage prompt payments.
Increased transparency in payment practices should lead to a more reliable business environment for small enterprises.
These findings underscore the need for more stringent measures to ensure timely payments.
Industry experts also advocate for these measures, citing the significant impact of late payments on small enterprises.
For small businesses, these measures signify hope for a fairer, more transparent business environment.
The introduction of stricter payment practices for large firms promises substantial benefits for small businesses. Improved transparency and enforcement are set to foster a more reliable and fair business environment.
As these reforms come into effect, they offer hope for small businesses to thrive and grow without the burden of late payments.
