Editor | 16 October 2017
2% of small business owners have faith in late payments commissioner

2% of small business owners have faith in late payments commissioner

Survey evidence has revealed that a tiny proportion of the smallest UK businesses believe that the newly appointed Small Business Commissioner will tackle the late payment crisis.

Research from cloud accounting software company FreeAgent shows that just 2% of UK microbusinesses believe that the new Commissioner, Paul Uppal, will take the challenge ‘seriously’.

Other research from the company shows the scale of the problem.

Last year, FreeAgent found that only 51% of invoices sent by its microbusiness customers were paid on time.

Paul Uppal, a former Conservative MP who has a long history running small businesses, was appointed by government following a two year wait.

The key objectives of the role are to:

·       

Assist small firms in resolving disputes with larger companies (primarily by signposting them to existing mediation services).

·       

To help drive a cultural change in business payment practices.

But many small business owners would like the new Commissioner to be given stronger powers and a wider remit to tackle late payment issues.

FreeAgent found that a whopping 70% of microbusiness owners would like the ability to claim compensation from late payers.

They also found that 59% wanted the Commissioner to implement a code of conduct. Less than one third (29%) of respondents said that they thought naming and shaming late payers would help.

Ed Molyneux, CEO and co-founder of FreeAgent, says, “It is good news that the government has finally appointed a Small Business Commissioner, with the specific remit of dealing with the late payment problem faced by micro-businesses. However, the reality is likely to be that Mr Uppal will actually have limited power to punish companies who routinely pay late, aside from just naming and shaming them.

“Micro-businesses and their owners are acutely affected by late payments. Unlike bigger companies who can often wait to be paid, micro businesses need to get paid promptly to keep their business in the black. We need to see a complete cultural shift when it comes to paying invoices, so that these types of smaller businesses are not put at risk.”

Miles Grady, Director of Cloud Accountant said: “As a business owner himself, Mr Uppal should understand the scale of the late payment problem. Self-employed people and people who own businesses can spend weeks chasing invoices when they should be helping clients.

“The fact that only a fraction of microbusiness owners believe that the Commissioner can make a difference should be a wake-up call to the government. I hope that he can bring about a change to the late payment culture, but I think he will need tougher powers if he is going to make a real difference.”

 

Cloud Accountant offers a range of supported accountancy software packages to help your business prosper. Get in touch for more information. Call: 0808 281 0303.