Small businesses do not have big cash reserves to tide them over month to month, so as their books fill up, prompt payment from customers higher up the supply chain is essential. Britain’s first ever the Small Business Bill, announced in the Queen’s Speech, will require large companies to publish their payment practices. This will give small businesses the information they need to negotiate fair payment terms and have their invoices paid in a timely fashion.
To help speed up payment, the Small Business Bill will also allow small firms to use ‘cheque-imaging’ software on their smartphones and tablets, making for faster clearing processes and allowing funds to be accessed more swiftly, with a goal of cheque clearing in one day.
Commenting, Nadhim said: “I used to run my own small business, and I know exactly how important it is to be paid in a timely way. When making decisions on staffing or investment small business-owners need the certainty that they won’t be left out of pocket at the end of the month.
This is an issue I’ve campaigned on for small businesses in Stratford, and I’m delighted that the Government are taking action. Requiring large companies to be upfront about their payment practices will ensure that everyone knows where they stand, and is an important step in driving a more responsible payment culture.”