Late payments are a headache for small businesses and the Government has estimated that if they were paid on time it could boost the economy by an estimated £2.5 billion annually. Nicola Roby, Director at CHW Bolton accountants looks at what the Government is doing to tackle the problem.
The Government appointed Paul Uppal as Small Business Commissioner in October 2017. His role is dedicated to supporting the country’s 5.7 million small businesses, and assisting them to resolve disputes around payment practices.
Government statistics indicate that, a third of payments to small businesses across the UK are late and 20% of all small businesses have encountered cash flow problems as a result.
As well as appointing Paul Uppal, at the end of last year, the Government launched a complaint-handling website, providing guidance to companies on payment issues and how to take action if a payment is overdue.
Margot James, Small Business Minister has commented that whilst over the last five years the amount owed to smaller businesses has more than halved from £30bn to £14bn, she added that the appointment of a commissioner will empower small businesses to take action and clamp down even harder on the problem.
Mr Uppal said that his mission is to “help all small businesses nurture positive and lasting relationships with their customers that work in the best interests of both”.
He also said, “Having run my own small business for over 20 years I am well aware that integrity and trust are key to running and building a successful business.”
Nicola Roby, Director at CHW Small Business Accountants in Bolton says “The UK is gripped by a poor payments crisis which impacts the small business and its owner and is also damaging the wider economy. The Small Business Commissioner could prove crucial to turning the tide on this late payments culture and we will be encouraging our SME clients to use the service where appropriate.”
She adds that “Whilst funding is an option to bridge the gap in cash flow when debtors are slow to pay, it is far better if businesses can tackle the problem. There are numerous cloud-based software providers which provide tools to assist in debt collection on which we are able to advise our clients.”
Our Bolton Accountants look forward to continuing to work with our SME clients both existing and new and it will be interesting to see the impact these steps taken by Government will have on the market.
To discuss any issue relating to small business accounting contact Nicola Roby at CHW Bolton Accountants either by calling 01204 534 031 or by filling out our enquiry form.
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