Late payment – the business practice of imposing unreasonable payment terms up front and then withholding payment for as long as possible, is a scourge on UK businesses.

Apart from being an unfair and unjustifiable practice, it leads directly to the closure of 50,000 small businesses a year. The reason is simple and summed up by the old adage ‘cash is king’. If businesses have restricted cash flow, they face unrestricted challenges. This is a problem for big business – but an even greater one for smaller enterprises, which have smaller reserves and less borrowing power.

When businesses are paid late, it causes them financial hardship and stifles growth. Everyone deserves to be paid on time when they have done the work and provided the goods and services requested. No one should have to wait months on end to receive the money they’re owed.

So I am pleased to report that ministers have listened to FSB’s calls to make company boards accountable for their payment practices; to increase the powers of the Small Business Commissioner; and to strengthen the Prompt Payment Code.

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They have announced that the government intends to crack down on bigger businesses which have poor payment practices towards their smaller suppliers and contractors.

By forcing audit committees of big businesses to report payment practices in company annual reports, there will be no more covering-up by those who treat smaller suppliers shabbily.

We have long campaigned for the measures and it is very welcome to see them being put into action.

We will continue to support and work with the Small Business Commissioner as he seeks to make full use of his new powers.

Ultimately, we hope that ending late payments will kick-start early ‘wins’ – in the form of increased security, investment and grow amongst our small business communities.