The government has been consulting on how to drive a step change in business payment culture in the UK. While late payment to SMEs has halved in recent years, it’s still a major cause for concern for many small and medium sized firms.
Improving payment practices is also a manifesto commitment for this government and the issue continues to be important for CBI members across sectors, becoming as visible as the gender pay gap.
For small and medium sized business members, late payment is consistently raised as a challenge to being able to operate sustainably and confidently. For large businesses, a range of new policy and regulation measures mean the landscape is quickly shifting, with new responsibilities required of many large firms.
We worked with our membership to respond to the Department for Business, energy and Industrial Strategy (BEIS) Call for Evidence, highlighting the different dynamics of payment performance between different UK sectors and the factors that impact how quickly businesses can pay each other.
We promoted the need to provide greater assistance for SMEs in adopting payment technology that make payment processes easier and quicker, and argued for the Small Business Commissioner to have greater oversight of companies’ payment performance through better data.
Members agreed that businesses want to go further in the detail of their payment practices, and the CBI suggested that government should expand the scope of the payment reporting regime to build a more detailed picture of payment performance.