This is my last week in the role of Small Business Commissioner before my term comes to an end. I’m moving on from a job I’ve loved for 4 years, yet after 4 years in the job I am looking forward to the new opportunities I’m being given. I know the time is right to move on to pastures new, but micro and small businesses will always be my passion.
When you get to this point it’s usual to look at what you set out to achieve and at what you have achieved, and sometimes aspiration and reality don’t bear comparison. There is still much to be done 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.
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 that 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. We have a greater understanding of the need for better payment terms in contracts and not just an emphasis on getting invoices paid on time, and we have just published our guide on creating contracts. The team at the OSBC is forging ahead and better placed than ever to support those experiencing late payments.
We’ve shifted the conversation away from the need for stop gap financing for suppliers struggling to manage their cashflow because of late payments to the need to get payments in quicker to manage cashflow and working capital without the need to put further strain on margins with the costs of temporary borrowing. We have been able to commission, with DBT, research into the impact on the economy and businesses of overdue invoices and poor payment terms. We are also looking forward to the launch of a new consultation into additional powers for the OSBC late this year. I may not be in post to implement the result of that consultation but I will be watching with excitement at how additional powers may change the game.
Thank you to the OSBC Team for their wonderful work and support over the past 4 years and all power to them and the new Commissioner for the next few. I may not have moved the dial as much as I’d have liked but I still believe it can be done.
