ACCA joined with SNP Spokesperson for SMEs, Enterprise and Innovation, Douglas Chapman MP, as he hosted a roundtable at Westminster this week to discuss the UK’s crippling late payment culture.
The discussion was led by ACCA Scotland and included representatives from ACCA across the UK, working both in practice and in business, plus the UK’s late payment ‘tsar’ Small Business Commissioner, Liz Barclay, was also in attendance.
The discussion covered analysis of the impact of poor payment practices on businesses, how these businesses cope with late payment of invoices and ways to minimise risk, and the role of accountants and the Small Business Commissioner in supporting SMEs within the wider context of instability and insecurity in the current economic and fiscal environment.
Douglas Chapman MP said: ‘This roundtable discussion comes at a crucial time for SMEs across the country, many facing huge challenges not just post Brexit and post pandemic, but in terms of the cost-of-living crisis and a global energy crisis. Poor payment practices can lead to shattering consequences for SMEs in terms of their operating costs, servicing debt, paying staff and suppliers, and ultimately, can result in companies going out of business.
‘SMEs are the very backbone of our economy, but they are struggling to survive in this volatile climate with the Federation of Small Businesses reporting that in the last three months alone, over half of the UK’s small firms have fallen foul of late payments. We can’t have a thriving economy, we can’t improve our prospects, and we can’t create resilience and security without a practical, solution focussed approach on tackling poor payment practices.’
Susan Love, Strategic Engagement Lead for ACCA Scotland commented: ‘Managing cashflow has never been more important for firms, and poor payment practices, alongside crippling cost increases, is often a key factor in the cash crisis many smaller firms experience. As economic challenges for firms mount up, we warmly welcomed the opportunity to share the feedback about late payment from our members, and the firms they support, and look forward to working with decision makers to improve the broken payment culture.’
Small Business Commissioner, Liz Barclay said: ‘I was delighted to talk with accountants who are dealing with these small suppliers, and the suppliers themselves, on the nuts and bolts of poor payments practices, including late payment of overdue invoices and the imposition of long payment terms. We need more of these conversations, and we must get the bigger customers round the table to discuss this too. We talk about a cost-of-living crisis, but in reality, we are also in the middle of a cost of doing business crisis and many small suppliers are struggling with this double whammy.’
Graham Parker, Director of Condies added: ‘I was pleased to represent ACCA and get together with Mr Chapman and other ACCA members and businesses to highlight small business concerns including late payments, payment practices and the wider implications of credit terms.’
Elaine Cromwell, Partner, Thomson Cooper said: 'One solution discussed at the roundtable with the Small Business Commissioner was the development of an easily understandable toolbox for SMEs that would explain clearly what they need to look out for when negotiating contracts with customers, especially larger ones, best practice, and options available to them under the law. For SMEs that have trade as well as private customers, having written terms is vitally important for both types of customers against the backdrop of the current cost of living crisis.'
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