Tag Archive for Late payments

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Late payers to small business could be barred from public sector contracts

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Originally written by Timothy Adler on Small Business
Some of the biggest Government contractors face being barred from public sector contracts if they fail to start paying small businesses on time.
From September, outsourcers which do not pay 95pc of small business subcontractors within 90 days could be frozen out of public sector procurement, according to Cabinet Office plans. The rule would apply to all contracts worth more than £5m in the £50bn Government procurement sector.
Outsourcers including Kier, Balfour Beatty, Mitie and Capita have fallen below the 95pc threshold, according six-monthly data collected by the business department, and would be excluded from bidding for new contracts.

Percentage of suppliers paid within 60 days%

Kier82%

Balfour Beatty82%

Mitie88%

Interserve90%

Capita90%

Serco96%

G4S100%

Source: company reporting

 
Last week, the Government announced that large companies which pay small businesses late could be fined under new powers given to the Small Business Commissioner. But professional associations and payment platforms say the Government late-payments crackdown does not go far enough. All large companies should be forced to pay small business suppliers within 30 days, they say.
“We expect [all companies] to meet the 60-day target and, if they don’t, they may not be considered for public sector contracts,” small business crown representative Martin Traynor told the Sunday Times.
Traynor

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Government must halve late payments window to 30 days, urge experts

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Originally written by Timothy Adler on Small Business
Government reforms to pressure large businesses to pay small business suppliers on time do not go far enough, say experts.
Small Business Minister Kelly Tolhurst announced yesterday that entire corporate boards will be culpable if large businesses do not pay SME suppliers on time, not just finance directors, as previously mooted.
Large businesses could also be fined for failing to pay small and medium-sized business suppliers on time, as part of a Government crackdown on SME late payments.
The Small Business Commissioner could have beefed-up powers to tackle SME late payments and enforce binding payment plans.
However, the Government has ducked compelling large employers to sign the Prompt Payment Code and to close the late payments window under the code from 60 to 30 days, say professional bodies.
Malcolm Harrison, group CEO of The Chartered Institute of Procurement and Supply (CIPS), said: “More change is necessary. It is important we do not stop there and continue to drive down lengthy payment terms in supplier contracts to ensure SMEs are able to manage their cash flows, to grow their businesses and remain productive.”
Lengthy payment terms
Peter Kubik, partner at accountants UHY Hacker Young, said: “New proposals do not get to

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Large businesses could be fined for failing to pay SMEs on time

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Originally written by Timothy Adler on Small Business
Large businesses could be fined for failing to pay small and medium-sized business suppliers on time, as part of a Government crackdown on SME late payments.
The move will see entire company boards held responsible for supply chain payment practices, and not just finance directors, as previously mooted.
The Government has also announced a new £1m fund to to encourage businesses to use technology to simplify invoicing, payment and credit management.
And the Small Business Commissioner could have beefed-up powers to tackle SME late payments and binding payment plans.
SME late payments result in the closure of more than 50,000 small businesses each year, according to the Federation of Small Businesses, costing the economy £2.5 billion. On average, small businesses are owed £80,000 apiece. In 2018, Britain’s small businesses collectively spent £6.7bn just to collect money they were already owed – a huge drain on investment.
From now on, company boards will be held accountable for payment practices to small businesses within their companies in a drive to increase transparency and accountability on late payments. Measures will force audit committees to report payment practices in company annual reports.
The Small Business Commissioner will also assume responsibility for the voluntary

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How to tackle late payments to your small business

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Originally written by Antti-Jussi Suominen on Small Business
Small businesses face an ongoing threat from late payments. Chancellor Phillip Hammond announced in his Spring Statement plans to “tackle the scourge of late payments” by large corporations to their small suppliers. Promising a “brighter future”’ for the UK’s 5.6 million small businesses, he outlined a requirement for big companies to report on how they’re paying their suppliers.
According to the Federation of Small Businesses, around four in five businesses have been paid late, the impact of which is far-reaching.
Bacs, the bank money transfer service, has calculated that Britain’s small businesses spent £6.7 billion in 2018 just to collect money they were already owed. Furthermore, the same research revealed that over a quarter of small business owners who have experienced late payments have been forced to pay their own suppliers late, and 28pc say they’ve had to cut their own salaries in order to keep their business afloat. Indeed, cash flow issues arising from late payments mean that more than two million people in the UK may not have been paid in time.
Late payments result in the closure of more than 50,000 small businesses each year, says the FSB, costing the economy £2.5 billion.

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5 ways small businesses can keep on top of freelance payments

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Originally written by Nick Woodward on Small Business
Many small businesses rely on highly skilled freelance and flexible workers to help them grow and run efficiently. It is imperative that in order to retain and attract the best talent, businesses do not repeatedly make freelance payments late.
According to the Federation of Small Businesses, late payments are killing 50,000 businesses a year.
For a small business looking to scale up and grow, it is vital that they avoid late payments and do not join the list of businesses that are dying because of them.
Here are five ways that businesses can keep on top of their payments:
Standardise timesheets
Many small businesses that rely on contractors receive a vast array of timesheets, ranging from highly detailed Excel spreadsheets to handwritten letters and even faxes. The process of sorting all this information out is confusing and a waste of time.
Small businesses should ensure that all freelance or flexible staff submit their timesheets in a coordinated and standardised fashion to reduce time spent organising them.
Ditch paper timesheets
Paper timesheets may have worked in the past, but the truth is that they are more prone to human error, use up paper and take up physical space. Timesheet errors are made

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Small Business Commissioner claws back £3.1m over last 6 months

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The Small Business Commissioner has clawed back £3.1 million in late payments owed to small businesses by large companies within the last six months. According to new research from Funding Options, this compares to just £380,000 repaid in the previous six months. Government launched the Small Business Commissioner in December 2017 to help small companies

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Report reveals poor payment practices from these big names

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A new government report shows how long it takes some of the high street’s biggest names to pay small suppliers. The inquiry by the Business, Energy and Industrial Strategy Committee (BEIS) highlights issues which hinder small business productivity. These include payment practices, support and advice, leadership and digital skills. Rachel Reeves MP, chair of BEIS,
The post Report reveals poor payment practices from these big names appeared first on Small Business.

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Here’s seven tips for getting paid promptly as a small business owner

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For all the freedom that being a business owner brings, being paid late is one of the most disempowering and dispiriting things about self employment. SMEs in the UK are paid on average 21 days late, which has an affect on cashflow, financial freedom, and in some cases even mental health. According to recent research
The post Here’s seven tips for getting paid promptly as a small business owner appeared first on Small Business.

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Late payments do growing damage to business owners’ mental health

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The number of business owners suffering from mental health issues has rocketed in the last year thanks to late payments. Half of SME owners’ businesses – 23 per cent more than last year – have been teetering on the edge of bankruptcy or liquidation because they are being paid late. Over half (52 per cent)
The post Late payments do growing damage to business owners’ mental health appeared first on Small Business.

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