I was delighted to participate in a recent teleconference relating to late payment with Kelly Tolhurst MP and Paul Uppal, the Small Business Commissioner.
Representatives from companies large and small participated in the conference raising a whole number of issues with the small business minister including:
• The impact of large businesses creating excessive deferment periods for payment;
• The impact on small businesses and delayed payment by businesses small and large;
• The debate about voluntary codes versus the provision of out and out loud legislation and the strengths and weaknesses of both approaches;
• Despite the clarity offered by current legislation, enforcement of late payments with interest charges et cetera can often sour business relationships for subsequent transactions making most businesses avoid asserting their rights;
• The enormous extent of the late payment problem overall.
Delays in payment reference present several challenges for small companies. They involve those companies taking up the slack for the poor financial management of other organisations, incurring cash flow problems, inability to pay taxes, interest and other charges and for the smaller firm, enormous stress.
What was encouraging, was to see the receptiveness both of Kelly and Paul to try and better understand the challenges generated by this phenomenon and one gained a real sense that in this corner of government at least, a true commitment exists to trying to address this far from straightforward problem.
I get the sense we can all look forward with interest to the outcomes of these deliberations. Late payment is an all too recurrent experienced by many of our client companies at Gedanken and we frequently have to assist them to develop strategies to mitigate its impact on organisational growth.