Fed-up businesses have spoken out about crippling late payments which are forcing redundancies, stifling growth and mounting stress.
A new campaign by Staffordshire Chambers of Commerce encourages small businesses to share their experiences of late payments as the Government consults on proposed new legislative measures.
According to the Department for Business & Trade (DBT), late payments cost the UK economy almost £11 billion per year and close down 38 UK firms every day.
Richard Stone, Managing Director of PR firm Stone Junction, has described late payments as a potential ‘killer’ for business.
He said: “Cashflow is the oxygen that small businesses need to survive, and pushing a payment out by even a month can be existentially damaging for a sole trader or micro firm. For large businesses, there is really no need to do so. It’s a question of asking whether the few pence you gain in interest is worth the problems it creates for your supplier? I don’t think any ethical company can argue that it is.”
Although the Stafford-based company doesn’t currently suffer from late payments, it has in the past and Richard has described it as being ‘crippling.’
He added: “We’ve had a large business based in the United Kingdom fail to pay its bills for ‘administrative’ reasons for well over a year. We’ve experienced two customers in our 20-year lifespan go into bankruptcy owing large sums, only to set up office the next day, in the same building, with a new company doing the same job.
“We survived all these things and despite them, we’ve prospered. But I don’t want other companies to go through the same problems, so let’s unite as an industry to act ethically and ask others to do the same. Let’s help British business breathe again.”
Kathryn Bayliss, pictured above, Managing Director of Stafford Industrial Supplies, has described an incident when her company was owed tens of thousands of pounds by a customer for months’ worth of personal protective equipment (PPE).
The Stafford-based business faced significant challenges as a result of delayed payment.
Kathryn said: “In the worst instance, we were owed a substantial amount over an extended period, which created a lot of uncertainty and pressure on the business. Situations like this are extremely difficult to manage – you’re constantly balancing commitments and trying to plan ahead despite the setbacks.
“As the person in charge, you have to stay focussed and positive for the team, even when the challenges are weighing heavily.”
She added: “Small businesses don’t have the time or resources to take legal action, nor do they have the financial cushions that many larger organisations do. It’s time this issue is highlighted more.”
A Government consultation on proposed late payment measures is running until 23 October and Staffordshire Chambers wants more local businesses to get involved.
The organisation also wants firms to share their late payments experiences to feed into its late payment reform.
Declan Riddell, policy adviser at Staffordshire Chambers, said: “A healthy cash flow is critical for our local businesses to survive and grow.
“We know there are cases of bankruptcies, redundancies, stalled growth, businesses being forced to delay paying their own staff and suppliers and staff time being wasted on chasing unpaid invoices.
“This is having a ripple effect across the economy and now is the time to come forward with those stories to help us push for action to be taken.”
Leigh Ingham, MP for Stafford, Eccleshall, and the villages, is also calling for new laws to stop big companies from keeping small businesses waiting months to be paid, describing small businesses as the ‘lifeblood of Stafford’s economy’.
She said: “They create jobs, keep our high streets vibrant, and build stronger communities. But too many are being left out of pocket because bigger firms delay paying their bills. That’s unfair, and it’s holding our local economy back.”
- Businesses who can share their experiences of late payments with Staffordshire Chambers should email declan.riddell@staffordshirechambers.co.uk
- The Department for Business and Trade consultation can be found here: https://ditresearch.eu.qualtrics.com/jfe/form/SV_0v37vzvBpfM5Exw
- Edgar Blazier, founder and director of SYTECH, has come up with his own proposals on how the late payments crisis could be addressed, read more here.
