According to figures from the Department for Business & Trade (DBT) and research from the Federation of Small Businesses, delayed payment of invoices currently costs smaller firms £22,000 a year on average.
New rules are being introduced today by Government that will require companies to include payment reporting in their annual reports. This is intended to increase the transparency of the payment process, in particular payments to smaller firms.
The government is also consulting on new laws that will hold firms to account for late payments and ensure cash flows into businesses. The consultation will consider policies aimed at addressing poor payment practices.
Commenting on this, Road Haulage Association (RHA) MD Richard Smith said: “We’re in favour of measures aimed at boosting economic growth, as evidenced by our recent Blueprint document.
"As an economic enabler, businesses across the road transport sector play a critical role in the supply-chain and in the daily lives of all of us. To get the growth the country needs, money needs to move around the economy and late payments are damaging to that.
“Late payments can have a real impact on businesses and the overall economy. In particular, this acts as a barrier to growth for SMEs. We welcome steps to tackle the issue by increasing transparency.
"We want to work in collaboration with Government to help drive growth across the entire road transport sector and the whole UK economy."