There can be no doubt that in sectors such as the Scottish construction industry the blight of late payment is both prolific and negative but it shouldn’t be a situation in which suppliers are powerless onlookers.
By acting as a group and not out of individual self interest is should be possible to tip the balance back towards the supplier.
In 2015 there was a flurry of government initiatives such as the creation of a Minister for Small Business, Industry and Enterprise (@Anna_Soubry), the announcement of the search for a Small Business Commissioner to arbitrate over late payment (and other) disputes, the announcement of an initiative to require large organisations to publish details of late paid invoices and the constant calls for a mandatory standard terms of 30 days settlement of invoices most of which are positive steps towards tackling the problem in a practical way.
Other voices are calling for a culture shift away from late payment as an accepted aspect of doing business to one in which it is seen as bad business practice.
However, in spite of all those largely positive efforts the general focus remains on debtor organisations to see the error of their ways and mend them or, failing that, for them to be forced to comply in some way.
At The Late Payment Directory we would like to see a fundamental shift away from viewing the debtor as the only starting point for a solution to the problem to one in which suppliers are the also one of the key starting points in a broader solution, and in doing so wrest control of the situation back towards the supplier community.
We would like to see a shift in the mindset of suppliers away from an almost enforced acceptance of late payment as a fact of business life to one in which the business-to-business supplier community takes an active long term role in addressing the problem for their own benefit.
In many areas of life where a problem exists prevention is often considered to be better than cure. Regarding the late payment of commercial debts, knowing if a potential new customer or even an existing one is likely to start settling invoices late, and crucially the reasons why, can help suppliers mitigate the problems caused by late payment.
Those problems can sometimes result in nothing less than redundancies or even insolvency, so the stakes are high.
To have to make redundancies or close a business because of a potentially preventable set of circumstances is a bitter pill to swallow for business managers and especially for entrepreneurs. A needless sense of powerlessness can only make it harder but it shouldn’t and doesn’t have to be like this.
Crowdsourcing is a democratic solution for addressing situations like this and it has already been used to dramatic and positive effect in dozens of other areas of commerce from travel to the workplace and even to policing.
By sharing anonymised experiences of late payment for the benefit of the whole business community there are several good outcomes:
Towards the end of 2014 the government carried out a consultation on the issues around late payment, it was published in March 2015. One of the key findings was that the business community wanted greater transparency around the whole issue. At The Late Payment Directory this is exactly what we’re working towards. To learn more, click here.