The UK’s Small Business Commissioner Paul Uppal has urged business owners in Swindon to make use of his office and team to help tackle the culture of late payment.
Attending an event organised by the town’s leading referral group BusinessWise at The Workshed on Tuesday May 7, Paul told business owners his role was to tackle the ‘long-standing institutional problem’ of late payment between small businesses (50 employees and less) and larger businesses or corporations.
“If we can change this culture of around payment, it would boost our whole economy. In some other countries, businesses wear their good practice around payment as a ‘badge of honour’ including in Germany and Scandanavia.”
He told business owners who attended that his team had, in the last six months, recovered around £3.5m for small businesses who had been kept waiting for an unreasonable length of time by bigger businesses. He also talked about the ‘bad practice’ of using a ‘discount incentive’ to encourage small businesses to discount their prices in return for prompter payment – when prompt payment should be standard practice.
“I often tell corporations when I meet them,” Paul said. “That the sooner they pay their supply chain, the sooner the money comes back around to them.”
Paul, who took on the government appointee role about 16 months ago, was involved in a family construction firm for around 20 years and understands the stresses and strains of running a small business. His office is based in Birmingham and is accessible to small businesses nationwide.
“What small businesses need is a predictable cashflow as owners will not grow, recruit or invest – and take on more responsibility and often more hassle – if they cannot rely on being paid on time,” Paul said.
One power that the Office of the Small Business Commissioner has is to ‘name and shame’ companies which take months to pay their bills. Recently Holland & Barrett was named for taking an average of 68 days to pay their suppliers – after a technology company asked for help in getting an invoice for £15,000 settled. This bill has now been paid. Holland & Barrett revealed that their standard payment terms are 90 days however the supplier concerned had 30 day terms.
Paul Uppal told the attendees this kind of issue is one his office will try to help with and needs to know about to gather data on the UK wide picture. He also revealed the boss of Holland & Barrett is travelling from Chicago to meet him later in May to discuss resolving this issue.
The event at The Workshed was organised by the not-for-profit business referral group BusinessWise which meets fortnightly in Swindon on a Friday. Chartered surveyor Jerry Thornton is the chairman.
He said: “Paul was a fantastic speaker and shared so much useful information for business owners. Late payment can be crippling for a small business – we had business owners in the room who had suffered and had taken up to a year to be paid. This can cause a business to fail. We should use the information Paul has given us to start to tackle late payment in Swindon and beyond.”
For more information on the Small Business Commissioner visit https://www.smallbusinesscommissioner.gov.uk.
Author and credit: Fiona Scott Media Consultancy.