What small businesses need to know about the Government’s new payment and cash flow review

The review will assess the success of the existing practices and measures used to combat the late payment of debts and to ensure the UK has the right arrangements in place to best support small businesses going forward.

Amongst other things the review will consider:

• Transparency and advocacy, including making recommendations on the role of the Small Business Commissioner, Small Business Minister, and BEIS in holding late paying firms to account.
• Progress by business sectors – identifying which sectors have a culture of late payment and the reasons behind this.
• The impact of late payment on business sustainability (the ability to pay bills and wages, etc.) and growth (having the money to buy stock, equipment and invest in the future).
• Existing government levers and how they can be improved, this includes for example the Prompt Payment Code and statutory interest on outstanding debt pursuant to the Late Payment of Commercial Debts (Interest) Act 1998.
• Finance and the role of banks in managing cashflow effectively.
• Improving awareness of support and tools available to support small businesses.

With the government estimating  that small businesses, which typically operate with low cash reserves, have over £23.4 billion currently owed in outstanding invoices, this review will be welcomed by all small businesses across the UK.

Chartered Legal Executive, Jayne Smith, has almost 25 years’ experience in debt recovery and enforcement acting for both debtors and creditors. If you need help, please get in touch.