Poor payment practices take many different forms. Regardless of the specifics in each case, late or overdue payment or long invoice contractual terms (for example payments in 60/90/120 days) affects the welfare and the mental health of small and micro-business owners.
Unfortunately, small businesses which are affected by the late or non-payment of invoices often choose to put up with the problem. The main reason is to keep good working relationships with the customer who is paying the invoices, especially if there’s the offer of further work on the horizon. This can be particularly important for freelancers, working in often very competitive industries.
Failure to pay an invoice – what to do
What can you do if you or your business manager need to face up to a persistent payment concern? Are there steps you can take, and support available, to help you pursue persistently poor payers? And who might be there to back you up if things can’t easily be resolved?
>See also: Large firms should each have one person to deal with late payments – FSB
If payment has been promised, and contracts have been signed, that money is rightfully yours. If it’s not forthcoming and the customer simply isn’t paying up, you may need help. Knowing where to look for that help can be challenging, particularly given the ongoing pressures of maintaining a successful business alongside.
That’s where we come in. Staffed by professional caseworkers and led by managers with years of expertise in the small business and payments sectors, the Office of the Small Business Commissioner (OSBC) focuses on dealing with poor payment practices between small and large businesses.
We give information and advice, and work with large business stakeholders. We aim to keep payment issues at the forefront of UK business discussions. The OSBC also works hard to ensure that accurate information is made available to small businesses, both through the Office’s website and our casework team.
Common topics of concern dealt with by the OSBC include:
- support for dealing with delayed or withheld payments
- advice on how to take steps to avoid payments becoming late
- guidance on the most appropriate way to approach invoicing and cashflow management
The OSBC website is a great resource for small business owners looking for initial support and who want to find out about the more formal support the Small Business Commissioner and her team can offer in a complex dispute.
>See also: SMEs say late payments are a greater issue than they were a year ago
Currently, the powers that the Small Business Commissioner holds are focused on helping to manage disputes between small business suppliers and larger business customers. However, the OSBC team can work as informal mediators between parties in a dispute, as well as offering information about other kinds of financial and legal help. Not all these services are directly linked to government: the OSBC can help small businesses make connections with local and third-sector agencies as well.
The OSBC team of expert caseworkers can provide:
- general advice and information about resolving payment disputes
- a signposting service to further support, and to dispute resolution services through the OSBC’s own website
- a complaints investigation service focused on incidences of poor payment practice between small businesses (those with 50 or fewer staff) and their larger business customers (those with more than 50 staff).
The OSBC has the power to make recommendations relating to these complaints and help with dispute resolution. The OSBC’s services are completely free, and investigations will be treated anonymously if requested.
Anyone who raises a complaint with the OSBC will have their case assessed by an experienced caseworker, who will remain the single point of contact during the time a case is followed up. There’s no need to re-tell a story multiple times, and you’ll be regularly updated on any discussions the Commissioner and the team has with your debtor organisation.
Since its establishment four years ago, the OSBC has recovered almost £8m owed to small businesses due to poor invoice payment practices in larger firms. We have a good record in managing favourable outputs for small businesses faced with invoice payment challenges and have supported decisions that have resulted in significant benefit to the small businesses involved. The organisation continues to work to put small businesses first and advocate effectively on their behalf.
The OSBC is on Twitter, Facebook and LinkedIn, and conducts regular audits of the advice and guidance provided on its website. The casework team can be contacted on 0121 695 7770 between 09:00-17:00 (Mon-Thurs) and 09:00-16:30 (Fri), or via email at enquiries@smallbusinesscommissioner.gov.uk.
Liz Barclay is the Small Business Commissioner
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