One of the proposed policies which seems to have survived the swathe of pre-election promises and post-election decision making is the promise to provide independent professionals and small businesses with support when it comes to chasing late or non-payment by their creditors. The plans included a conciliation service designed to help resolve disputes over payments and there are plans to appoint a Small Business Commissioner to assist in these matters.
The planned conciliation service now has the working title ‘Small Business Commissioner’ and is designed to assist small businesses to resolve such disputes without resorting to court. The service will also help those who are engaged in pre-contractual negotiations by providing advice and information as well as hearing complaints that may arise in the wake of such agreements. The department for Business, Innovation and Skills are hoping to extend the powers of the conciliation service to tackle the unfair business practices which are responsible for a culture of unfair payment practices amongst some big businesses.
Already being referred to as the SBC, the plan is for the new service to fit with the existing measures designed to tackle late payment such as reporting requirements for larger companies who are obliged to disclose the details of their payment policies. Whilst the main function of the SBC is still open to consultation, it seems likely that it will be given the power to ‘name and shame’ businesses which continually fail to behave appropriately when it comes to making payments to the businesses that they work with.
Reactions to the news has been mixed, with the Association of Recruitment Consultancies praising the department for tackling the issue head on, while the British Chambers of Commerce is not convinced that the new service will go far enough to help resolve the issue long term. The Federation of Small Businesses is reserving judgment until there is news of how far the SBC’s powers will extend – they are hoping that these will extend to intervening in situations where late payment disputes are already ongoing and bringing them to a swift and successful conclusion. They also want the SBC to have the power to refer persistent poor payers to the Competition and Markets Authority if they believe that the way they are acting constitutes a harmful approach to doing business.
Anyone who has an idea of how to make the SBC an effective body can provide their recommendations to the government through their Small Business Commissioners consultation.
Late payment is one of the issues that independent professionals can face, and to be prepared for a range of eventualities, it always helps to have a specialist contractor accountant on hand to help. Our friendly team will be able to give you advice on how to ensure that you have contingency plans as well as advising on payment terms and anything else you may want to know about, so call us today on 01253 362062 or email us at firstname.lastname@example.org.