Research from cloud software provider FreeAgent found this week that only 2% of micro-businesses in the UK believe the Government's new Small Business Commissioner will take the issue of late payments 'seriously'.
The government appointed the UK’s first Small Business Commissioner last week, after a two year search, whose primary role will be to tackle the culture of late payments and “become a national spokesperson for small businesses affected by payment issues.”
With Britain boasting 5 million micro-businesses this equates to just 100,000 firms believing a significant change can be made by the government with the issue.
The scale of the problem is clear as only half of all invoices (51%) sent in the UK last year were paid on time, according to FreeAgent, who reviewed data from a sample of its 50,000+ customer-base and analysed hundreds of thousands of invoices.
Instead, micro-business owners would like to see much more stringent penalties put in place for those who don’t pay invoices. Seven in ten (70%) micro-business owners polled said they wanted to have the opportunity to secure compensation from late-paying clients, while 59% said they wish to see a code of conduct being implemented and adhered to. However, just 29% believe naming and shaming of late-payment offenders would be of use.
Ed Molyneux, CEO and co-founder of FreeAgent, said:
“It’s 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.”