Before becoming the Small Business Commissioner, Paul Uppal used to run his own construction business.
He knows all too well how detrimental late payments can be to a small business, having run a company in a sector where the practice is rife.
We catch up with him to find out more about his and what he can do for you.
Who is the Small Business Commissioner and what do they do?
This is a role which was established by the Enterprise Act of 2016. The Office of the Small Business Commissioner has been established to help small businesses around the issue of late payment, slow payment and non-payment from larger companies.
Our job is to go in and bat for small businesses when they’re struggling to get paid. Whatever is happening, whether they’re getting ignored or they feel they’re being messed around, we get involved and tend to get results. We’ve recovered £3.7 million for SMEs since we started around 15 months ago.
We’re here to help and there’s absolutely no cost involved for a small business to contact us. I find that, in almost all the cases we’re involved in and the business hasn’t gone bust, we’ve managed to recover most – if not all – of the money involved. That includes interest.
How does the dispute resolution process work?
There are a variety of ways you can approach us: by email, by logging your complaint on our website or by ringing us. From that point, we look at the individual case. If it sits under statute in terms of late payment, we can go in and act on your behalf. That can be through a few different methods, but we often start that interaction just by picking up the phone and speaking to people.
We normally reach out fairly early and if the complainant wants to remain anonymous, they can. They don’t have to specify who they are.
I think we expedite the whole process, going from a position where small businesses are told they’re not going to get paid at all to being paid 48 hours later.
Why do people wish to remain anonymous?
Connections are still essential for small businesses. They would rather have a commercial relationship than no relationship at all.
‘Small businesses would rather have a commercial relationship than no relationship at all’
On average, how long does the dispute resolution process take?
It varies, but if I look at report when I write one, it takes from a couple of months to less than a month.
So, when you say resolved, in terms of getting the money, I’d like to think we get the money fairly quickly – within a couple of days.
What state are late payments in and what will happen in near future?
There are a variety of things happening. There’s duty to report data where large companies have to submit forms on their payment practices as well as the Prompt Payment Code (I now sit on their operational board).
What I would say for us as an office is that we’re trying to link everything up. That means we work with stakeholders such as the Federation of Small Businesses (FSB) and the Forum of Private Business – we work collaboratively with them.
The subject of late payments is something that has grabbed the public’s imagination. Even with Brexit around, it still gets attention.
Once we regain the money for a small business we ask if it meets criteria. We publish a report on that which is partly naming and shaming – I suspect we’ll be doing a few more of those this year too. By doing this, we keep a spotlight on the issue. This is a longstanding problem and there is no easy fix. We’ve had conversations with over 1500 small businesses over the past 15 months and have a good idea of the problems that SMEs face around here.
For our office and everyone else involved in this space, we want to make life as easy as possible for an SME. The single biggest challenge they face is unpredictable cash flow. Late payments affect them in terms of growth, taking on new members of staff and a host of other ways. Anything we can do to bring a cultural change around here is a win-win for everybody involved.
What we do is about individual cases but it’s also about changing culture.
Which sectors suffer the most from late payments?
I would say construction is an area where there’s poor practice going on, but it’s not a sector we deal with (you’ll likely be covered by the Housing Grants, Construction and Regeneration Act 1996). I wouldn’t want to close this service off to anyone, though – if you’re experiencing late payments from a large business or a large institution, please come and speak to us.
Even if it’s not directly in our remit, we want to gather as much information as possible here. What I would say is give us the ammunition and we can fire the bullet.
How is Brexit impacting on late payments and how is it predicted to affect them in future?
We’re monitoring this quite closely now and we do have concerns. Whatever Brexit we get or don’t get, there are warning signs.
With small businesses there is a feeling of pressure being pushed down upon them in the supply chain because of Brexit-related issues. We specifically want to hear from small businesses about that.
What powers would you like to see the Small Business Commissioner have in future?
The current power is that when we write a report we can name and shame where we see poor practice. We hope to do more of that in the future.
Beyond that, there is a call for evidence being concluded by the department and I’m expecting some news about this shortly from our sponsorship department. The truth is, for the time being, I’d prefer not to comment. What I would say is that a lot of people do like to comment, so I guess that illustrates the demand for change. People have been suffering for a long time over this.
‘Don’t be embarrassed to talk about late payments’
I think that part of the challenge has always been putting the heart of the small business here. As a small business owner, you’re time poor. You are chasing audits, existing contracts and money. It is often the last thing on your mind.
I’d like to move to a landscape where the pressure is off the SME and there are bodies like ourselves that can go in on behalf of SMEs without them having to do a great deal. Anything that enables us to make the business of running a small business easier is something we would wholeheartedly endorse.
What advice would you give small businesses on managing cash flow and preventing late payments?
Don’t be embarrassed to talk about it. Often, when you’re a new start-up, nobody tells you about this, but it can be the defining issue for your business. Don’t be afraid to offend a business because you’d like to keep a large contract. It’s your money and you’ve worked for it, so chase it.
We do offer some guidance notes on our website but if you run into trouble, give us a call. It’s one of those boring subjects that people don’t want to talk about – nobody goes into business because they enjoy chasing money or want to do their VAT returns every three months.
You’ll normally start a small business because you’ve got a passion to do something. This is just one of those boring elements that you need to keep an eye on. If you don’t monitor your cash flow, you’ll quickly have no business.