Small Business Commissioner starting to make progress on recovering late payments
1 April 2019
- £3.4m clawed back for 91 small businesses - £3.1m in last six months
- Late payments causing cashflow issues for small businesses
- Increase the Commissioner’s budget to help more small businesses, says Funding Options
The new Small Business Commissioner is starting to making progress on recovering late payments owed by large companies to small businesses, shows new research from Funding Options, the online business finance supermarket.
Funding Options says that, in the last six months, the Small Business Commissioner has clawed back £3.1m in late payments for small businesses from 52 complaints it received (1). This compares to the previous six months when just £380,000 was repaid from 30 received complaints.
The Small Business Commissioner was launched by the Government in December 2017 to help small companies resolve payment disputes with larger companies.
The Small Business Commissioner had been criticised for making a slow start to its mission to help recover money owed to small businesses. Funding Options says, however, that it is now becoming more effective.
There had been concerns that small businesses would be reluctant to complain to the Small Business Commissioner about larger clients for fear of losing custom. However, the progress that the Commissioner is making should encourage other small businesses to come forward.
Funding Options says that huge cashflow problems can arise for a small business from just one major client not paying an invoice on time, in extreme circumstances causing insolvency.
Funding Options explains that the Small Business Commissioner should be given extra budget to help even more small businesses get back the money they are owed.
Funding Options adds that small businesses also need to look at ways to improve how they manage and forecast their cashflow. Businesses would then be better able to put in place finance for when they might run into cashflow issues.
Conrad Ford says:
“The Small Business Commissioner is finally hitting its stride. That’s shown by the number of businesses it has now helped and the money it has recovered.”
“A gap in cashflow sometimes means small businesses, who rely on timely payment from clients, are forced to forego investment in the growth of the business.”
“Larger companies certainly have the means to pay on time, so it’s a straightforward issue that can be avoided.”
(1) Data released to Funding Options by the Small Business Commissioner, September 2018 to February 2019 inclusive