June is my last month in the role of Small Business Commissioner before my term comes to an end. When you get to this point in a role it’s usual to look at what you set out to achieve and at what you have achieved, and there is so much still to do to change the payment culture in the UK.
I have learned that people working in big firms rarely set out to delay payments or not pay, but some ways of working, processes and silos effectively mean that payments take longer than they should and often longer than the supplier is lead to believe. It takes a culture shift at the top to examine the processes and actively look for ways to improve systems yet many firms don’t even know there’s a problem.
On the other hand, often small suppliers struggling because of long payment terms with payments delayed further because they’re overdue, won’t rock the boat and complain for fear of losing future work. That’s culture too and we need to work hard to take that fear and imbalance of power out of the system.
Then there are the tools companies use to do business, such as contracts. My new moto is ‘get it in writing’. As a freelancer and small business owner I‘ve been guilty of not following that advice. However, I am firmly persuaded that a written contract is an essential tool. When all parties agree the terms they build trust, give everyone a document to refer to and help avoid legal action which is costly and time consuming. Everyone has to make sure everyone else fully understands the clauses, the language used, and each other’s requirements when creating the contract and be prepared for some give and take. If there’s none of that and the terms are presented on a take it or leave it basis, you’re probably better to walk away from the work. That takes courage but could save you money and possibly your businesses in the long run.
Technology has helped improve payments terms, continues to do so and there’s more the tech companies can do. We will see progress over the next few years but despite all the tech, improvement will have to be led by the humans at the top.
On saying all of this, we have made big strides. We have a new Fair Payment Code which is aspirational and promotes better payments behaviour, pushing for that culture change. But with a way still to go, this month my focus remains supporting the micro and small businesses that will always be my passion.
