Host
Iain Wright, Chief Policy and Communications Officer, ICAEW
Guest
Emma Jones CBE, Small Business Commissioner
Producer
Natalie Chisholm
Transcript
Iain Wright: Hello and welcome to a very special bonus episode of Accountancy Insights. My name is Iain Wright. I’m ICAEW’s Chief Policy and Communications Officer, and I tend to be a regular guest on this podcast, but today I’m taking on the role of host, and I’m absolutely delighted to be speaking with the still brand new Small Business Commissioner, Emma Jones, who is, at the time of recording Emma, about six weeks into the new role. Is that right?
Emma Jones: Well, by the fact this is Accountancy Insights, we probably need to be factual on our figures, don’t we, so it’s week seven.
IW: Just to set the scene a little bit, one of the first signs of economic strife is an increase in late payments, which adversely affects small businesses. And one of the biggest priorities of the Small Business Commissioner’s office is fair and prompt payments, where a delay in payment can prove to be an existential threat. On average, £17,000 per business is affected by late payments. Late payments shut down 38 UK businesses every single day. And when you think about it, the small business community is a huge and significant part of the UK economy, with SMEs accounting for 48% of UK business turnover, indeed, 99% of all UK businesses. And the prize is huge. The Small Business Plan says that by accelerating growth by 1% a year, could deliver an extra £320bn to the UK economy by 2030 – that’s a fantastic potential achievement there.
EJ: Well, that’s why we’ve got to free up these founders, Iain, so they can spend their time and cash on that growth. And as you say, so many small businesses, such an important part of the economy. And it’s partly why I took on the job. So, you know this Iain, I came from the private sector, all I’ve ever known is starting, growing and running my own businesses. But the reason I was keen to take this job on at this particular time is because I think it’s an era of opportunity for small business, but we have to clear the way, to give them the time, the space, the cash, the investment, to do the things that they started a business to do. And you know this, is business owners don’t start businesses to chase late payment. They start businesses because they love the creative, they love baking, they love architecture. They start a business to do the thing they love to do. And the job, as you say, of the Office of the Small Business Commissioner is, how do we free them up to do that, with a particular focus on reducing the amount of non-productive hours chasing debt.
IW: I want to come on to the role and powers of your office in a moment, but I want to talk about you, and I think listeners will be thinking, Emma Jones, that rings a bell. I know you’re not a stranger to ICAEW, in fact, even without taking on the Small Business Commissioner’s role, you’re a big player in the small business ecosystem. Tell us about founding that business that had such a big impact.
EJ: So I founded Enterprise Nation. Enterprise Nation actually was my second company, and Iain, I don’t know if you know this little fact, which takes me back quite a bit in history, is pretty much the only employed job I ever had was with Arthur Andersen, so one of the then Big Five professional service firms. So my background began in accounting, so maybe that’s partly why I feel so at home working with ICAEW is those kind of accounting routes.
I was a shocking accountant, however, but what I loved was business development when I was at Arthur Andersen. So I worked on inward investment. I started my first business at the height of the dotcom boom. And actually, I was only reflecting on this this morning, one of the reasons I started my company, I was 27 when I started my first business, and one of the things that implored, or maybe the best word, is, motivated me to start, was a very positive media. Because at the time, all of the media was talking about how people were starting dotcom companies, they were raising lots of money, they were changing the way in which industries operated. And I felt hugely buoyed by this very positive press. We’ll maybe come back onto this. I’m a little bit nervous at the moment that we’ve got the opposite at the moment. We’ve got quite a negative press talking about the economy, so I’m super keen to get some positive headlines back in the papers about business.
But yes, I started that business, sold that business very quickly to, again, probably a member of ICAEW now called RSM Tenon, and then left Tenon to start Enterprise Nation. So that’s where I really got to know ICAEW. Enterprise Nation was all about helping people start and grow businesses. So we work super closely with your colleagues on the business advice service. And of course, I’m a long-held believer in the role that accountants play as being a trusted business adviser. So this is why I’m super keen to be back at this table with you, because I think accountants have got a huge role to play in buoying the economy again, but also particularly around this point of getting payments made on time.
IW: I mean, we’ve got a longstanding relationship. I remember, with a lot of affection, during the 2024 General Election, ICAEW and Enterprise Nation had a joint hustings in Chartered Accountants’ Hall where the major spokespeople of the three key parties came and said what they were going to do for business and small businesses. So we’ve got those longstanding routes together.
EJ: We’ve got that history. And Iain, you mentioned the hustings because that wasn’t the first hustings we’ve done in the Great Hall. So previous, we did one for the Brexit referendum. We’d done one for the previous General Election. I remember we had a previous Prime Minister come into ICAEW when he was starting his election. This was David Cameron I’m referring to, and I will never forget his speech at the time. And the reason why I say this is because small business runs through all of it, is he made now what is quite a famous, not a speech, because it wasn’t scripted, but he referred to himself as the start-up-in-chief of the government. And he said, you know, I’m launching my election campaign. I want to help all these small businesses. And this was, what, over a decade ago, and this is where we come back to, and you referred to it, a Small Business Plan launched last week.
Politicians, regardless of their party, recognise the vital importance of small business. We have lots of them. We want to keep them ideally. So we don’t want businesses going bust because of late payment. So how do we make sure we keep this incredible army of little entrepreneurial ants who literally power up our economy? So, as you say, all the events we’ve done at ICAEW is Enterprise Nation, ICAEW now hopefully I can continue that work in this role, working with government to say, how do we build the best policies? How do we build the right infrastructure for enterprise to flourish?
IW: But one of the things I really want to stress and get our listeners to be aware of is that you’ve had to live and breathe this. You founded a business, you’ve grown a business, you’ve had to spend time away from that business growth, chasing payments. People haven’t paid you on time. I mean, in terms of any experiences that you can bring to your new office.
EJ: Absolutely. And I think that’s one thing that really helps me in the role, and I talk about this a lot, is businesses. I’m working with government for you, and I’ve been in your shoes, so I know how it feels, and of course, what we hear when founders have to chase debt – so we have this statistic of small businesses on average, spend 86 hours chasing late payment, so that is time that they could be productively spending elsewhere – they could be hiring people coming up with new products, looking to export.
But Iain, the other thing about this is the toll it takes on the mental health of founders, because it feels such a thankless, non-productive task. It’s not anything that you want to be doing. So this, and absolutely, as you say, is the main remit of the office. And the way in which I see payment is kind of almost with payment, you’ve got two parties to a transaction. You’ve got the company making the payment. You’ve got the company waiting for the payment to come in. And of course, for small businesses waiting for it to come in, we want to give lots of help and advice on how you do things right? How do you contract? Well, upfront. I know it sounds crazy and basic, but sometimes payments can’t be made because there’s errors on invoices. You know, there should be a PO number that’s not on there. So we want to help small businesses get everything right, to get themselves in the best position to kind of keep those chasing hours low, but also to, of course, to work with large companies on how they get their systems right, to make sure that the payments can flow.
So as you say, I’ve been there, I know the misery of kind of chasing debt and a huge thing connected to this: small businesses don’t want to get too aggressive with their clients, because they rely on the income. So I’ve also been there in terms of, how do you get that delicate balance of getting paid for the products and services you’re delivering without breaking the relationship you have. And again, it’s why I’m kind of on a mission to say, let’s build a positive payment culture where it’s the right thing to do to pay your suppliers on time. So we’re not putting small business owners in the position where they feel they have to ruin the relationship purely in order to get paid.
IW: I’m interested in your point about culture. We’ll come on to the Small Business Plan, and again, the powers that are in your office in a moment. But in terms of culture, I’m fascinated about how society changes, and things that were once considered maybe respectable, acceptable, are now frowned upon, quite rightly. Drink driving is an obvious one. Even just 20 or 30 years ago, it would have been highly acceptable to take average couple of drinks and drive your car. Now everybody would frown on that. Do you think we can ever get to a position where, culturally, society will not put up with businesses being paid in a delayed manner?
EJ: I would love for us to get that to that stage and my message to businesses at the moment is just pay on time. You know, we’re not asking anything extraordinary, just pay on time. And one of the things that I keep on thinking, and it was said to me by a board adviser that we have, is businesses would never dream of doing payroll late. You have employees. You entrust them to help you build the business. You’d never dream of paying them late. Therefore, why do you even consider paying suppliers late? So I would love for us to get to that point.
And Iain, again, there’s an interesting dynamic at play, and I spoke about this when I was interviewed for the role, is that the powers that the Small Business Commissioner has at the moment are mainly carrot. It’s incentive powers. We have an amazing instrument called the Fair Payment Code. So we’re encouraging lots of large businesses to sign up to the Fair Payment Code, because it’s a public demonstration that they pay their suppliers on time. We’re sending out lots of messaging saying, not only is that a good thing for your suppliers, if you’re a fair payer, it will also help you attract the right people into your business. It will surely help you win contracts, because people want to do business with a good company.
So we’re doing lots of encouragement to encourage businesses to do the right thing. But of course, one of the things that came out with the Small Business Plan is we also have a consultation that’s live at the moment on penalties that we could, and just other legislation in terms of measures that we could take, that are slightly more stick. So this would say, if you’re not doing the right thing, we will have more powers as an office to take action. And I think it’s a combination, and I’m in the seven weeks I’ve been in role, it’s been amazing to kind of engage with the market, and everyone has a view on how we can try and, you know, get this issue sorted. And I think the conclusion I’ve come to is it’s probably a little bit of everything that we have to do. We have to do positive encouragement for companies to sign up to the Fair Payment Code. We have to do lots of communications to say it’s just the right thing to pay on time. We also need responses to the consultation to say, should we have more powers to be able to have things like maximum payment terms, mandatory interest on late invoices, penalties for companies who are repeat offenders?
So I think if we can get the full spectrum of all of those measures in place, I would love to see a world where, as you say, as per drink driving, in three to four years’ time, businesses like of course, I pay on time because it’s the right thing to do.
IW: So we’ve mentioned the Small Business Plan a couple of times, and that’s quite a comprehensive document in terms of strategies about a business growth service, about revitalising our high streets, about how can small businesses grow through access to finance? But in terms of the specific points about latent prompt payments, could you just outline to our listeners, you know you’ve mentioned the consultation, what else is in the Small Business Plan that will affect prompt payment and will affect the work that you and your office does?
EJ: Well, I guess, first of all, the launch itself was instrumental for us. So as you say, there’s a lot in the plan. I spent my weekend digesting it, because that’s how I rock these days. But the launch itself was phenomenal for us, because prompt payment was front and centre. So we had the Prime Minister at an event. The main focus was talking about the payment consultation. I went with the Small Business Minister to a prompt-paying butchers in Peckham, which is an amazing business called Flock and Herd, who are on the Fair Payment Code that I alluded to, they’re what’s called a gold awardee. So the whole conversation during that day around the small business ecosystem was around payment. So for us, that was a result in and of itself. Because one of the things, and I kind of go back to this point, is, if we can get it, business owners, small and large, are very busy people. They have lots on their agenda. And I completely appreciate that my job, the job of the office, is, how do we raise payment higher up on the agenda?
Indeed, one of the things, and I’m super keen to get ICAEW’s response on this, is audit committees’ responsibility and board level responsibility for looking at prompt payment data within a company. So can we tighten up on that, where every business is considering what are our prompt payment terms? Have we got this right? So the launch day itself was great. It really kind of raised the profile. And actually, what I should say on the day is what we also have to do now is manage expectations of timing, so any legislation can take a little bit of time to go through.
So we are now open for consultation with our payment report that’s out – that’s open for 12 weeks. So we’re hoping to get lots of responses. We’d love to see some from ICAEW member firms, which gives us feedback on the proposals that we’ve put forward. Then we would potentially get a slot in the legislative process to try and get things into law. That may not be for a couple of years. So this is where it’s a case of when small businesses say, well, what can I do now to kind of speed up my payment? This is why, as an office, we are still carrying on very much with business as usual information and guidance on how to do contracting well. Consider signing up to the Fair Payment Code. And in fact, once you’ve done it, please tell all of your peer group that you’ve signed up so they sign up too.
We’re doing huge amounts of engagement with trade bodies, everyone representing hospitality, to building, to the British Hairdressers Association, to say, right, how can we get information out to your small businesses on how to get paid on time, whilst also, can they share with their big companies to whom they supply, please consider signing up to the Fair Payment Code? So these are all the positive messages we’re sending out to market to say we want to continue to do this whilst looking at legislation, bringing certain things into law and toughening up those laws, so as I say, for bad players, we can take action as well.
IW: I’m so delighted that you’ve chosen, in your new role as Small Business Commissioner to do your first podcast with ICAEW. I suspect Emma, that’s not by accident. So you must have an idea, a plan, as to the role of chartered accountants in helping you fulfil your objectives. You know, chartered accountants, running businesses, advising businesses, are a big part of that small business ecosystem, and indeed, the payment ecosystem. What do you think the role of accountants are in helping you make sure that you succeed?
EJ: Well, first of all, thanks Iain for allowing me to pitch to your member firms. Because I think there’s three things that the ICAEW membership can help me to kind of do this job well, or as well as can be expected. The first is pay themselves, and I’m sure, and I say this, and I kind of thought, oh, do I say this to Iain? I’m sure all of your member firms pay everyone promptly. But I know you also have ICAEW members who, of course, have their own practices, but of course, you’ve got many in industry. So for those who are finance directors or in finance teams at large companies, I would implore to say, do have a look at the Fair Payment Code. Many large companies now have a public duty to report payment. About 50% of the businesses who should be reporting are doing that. We would love the other 50% to be reporting. So please, ICAEW membership, kind of have a look at your own payment practices. And as I say, I’m sure accountants are brilliant at doing this.
The second is, I’ve always found that the ICAEW practice firms are an amazing, naturally so, communication route through to small businesses. So I think there’s a huge role there for accountants to share with their own small businesses: here are ways in which we as your accountant can help you get paid on time.
And one thing I haven’t mentioned Iain, is if small businesses aren’t getting paid, one element of our office is we have what’s called a casework team. So if a small business needs to raise a complaint, we have a team that can deal with that. So, communication from accountants to their clients that the office exists, and what we have to do is kind of item number two, and then the third is, please respond to the consultation. I’ve mentioned this that one element is the role of audit committees.
We would love the view of the profession in terms of whether that’s viable, how we could deliver it, because I think this comes round to is if we can all work together to solve this problem, and as you say, kind of like drink driving, how do we get to a place where it’s just not permissible to pay late? It needs a full industry approach. It needs accountants sharing this with their clients. It needs trade bodies talking to their members. It needs media, press, podcast activity, and I think that’s where I would find, certainly value in the relationship with ICAEW, is your incredible channel to market, and I know your commitment to kind of saying, how do we boost the economy?
IW: I’m really interested in your second point. There will be listeners to this podcast, either advisers in practice, advising small businesses, or members in business, being a small business themselves, and they’re finding it a real struggle to get paid on time by maybe a larger company. So what do they do? How do they contact you? What are the practical things you know in terms of and we can send details associated with this podcast. But could you give them advice? How do they get in touch?
EJ: I’m kind of everywhere. That sounds a little bit unprofessional. I was going to say I’m very available, but then kind of thought twice about saying that, no, I am, and Iain, we’ve kind of referenced it already. I’ve been a small business owner. The last business I ran was all about small business, so I feel I walk in the shoes of small businesses. What I can’t afford to do is stop staying engaged with small businesses. Conditions change very quickly. So in terms of availability I post every Friday on LinkedIn. I’m always looking at the comments that small businesses leave as to whether they agree or disagree with the points that I’m making, and what I share each Friday is progress of our activity at the office, which I hope is helpful, but it’s also a brilliant channel for me to get feedback. I’m active on X, so again, people can kind of respond that way, but I mentioned as an official route, if businesses have complaints, we have a casework team. On the positive side, we have the Fair Payment Code team. But yes, businesses can contact me. And then, of course, if we can’t help, because we have a very strict and clear remit, we will absolutely make sure that businesses are sent to the right place.
IW: Now I know you, Emma, I know that you’re very goal-focused, so I want to invite you back in a year’s time, and actually in three years’ time, in that one- and three-year period, what is success for you as the new Small Business Commissioner?
EJ: I’m so glad you asked me this, because I’ve just come from a session where the analytics team presented the current prompt payment facts, and that was exactly my question to them, what does success look like, and how do we measure once we’ve achieved it? And so Iain, the one thing that I’m saying to the team in the office, it’s an amazing team who are working kind of so hard on this mission, is, I’ve said I think we will get closer to success on a couple of levels. Can we show we’ve reduced that 86 hours spent chasing debt on the small business perspective? Can we show we’ve increased the number of large companies on the fair payment code? They are qualitative things that we can have a look at. The size of the prize, if we get this right, is £11bn added to the UK economy. Can we show we have added growth to the UK economy by freeing these founders, reducing the hours they spend chasing debt, opening up these hours so they can spend on growth? So those are the metrics.
And the thing that’s much harder to measure, and I will only know it anecdotally through conversations, is can we show in one, two – my tenure is two years – but one, two, three years, that small businesses are feeling better, happier, more confident, more positive about their future. And I think if we can do that, all of us will be happy. ICAEW members will be happy. They’ll have happier clients. And starting and growing a small business can be tough, and it’s tough at the moment. You have lots of things on, lots of challenges. If we at the office can make that life just a tiny bit easier, then I will feel that we’ve hopefully done our job.
IW: Well, I think the government has appointed the right person. I’m absolutely delighted that you’ve got the position of Small Business Commissioner, and I think small businesses should be delighted as well. Emma Jones, Small Business Commissioner, thank you for coming on, and I hope you’ll come on again.
EJ: I would love to Iain, thank you so much for having me.
IW: That’s all for this episode, but your regular host Philippa will be back later in the month to discuss the history and future of money. You’ll find that and other episodes wherever you get your podcasts – and reassure yourselves that listening is always time well spent, not least as it counts towards your CPD. So make sure to log each episode at icaew.com as you listen. Thanks again to Emma and to you for being with us.
