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Payment culture, cost management and role of boards

13 May 2020: as businesses across the UK battle the economic consequences of COVID-19, the Small Business Commissioner joins ICAEW to discuss the long-term impact of late payments and the power his organisation has to tackle the issue.

Last month, ICAEW hosted a webinar with Philip King, the Interim Small Business Commissioner. The webinar received such a positive response from members that a second webinar is now planned for Friday 15 May, where King will return to outline his role and responsibilities and how coronavirus is impacting upon late payments. ICAEW members can register for the webinar for free by clicking on this link.

King will join Iain Wright, Director for Business and Industrial Strategy at ICAEW, and Yvonne Gale, an Institute member who is also a Non-Executive Director for the Small Business Commissioner, will reiterate how late payments is a matter for the boardroom, which both reflects and impacts upon the culture, mindset and reputation of a company. 

We will also hear the real-life case study of an ICAEW member who, after listening to last month’s webinar, contacted the Small Business Commissioner and received overdue payments as a result. 

The Small Business Commissioner is an independent public body set up by the Government under the Enterprise Act 2016 to tackle late payment and unfavourable payment practices in the private sector. 

Speaking ahead of the webinar, ICAEW’s Iain Wright said the case study that will be profiled in the webinar, along with many others, was proof that the Small Business Commissioner is undoubtedly having a positive impact upon the practice of late payments.

“Cash remains a significant pressure for businesses at a time of huge unpredictability,” said Wright. “As we embark on a new phase of lockdown, further lengthening the time much of the economy has shut down, that need for cash only increases in importance. 

“In these circumstances, companies may wish to hoard cash, neglecting to pay suppliers as agreed,” continued Wright. Such an approach would be a gross misjudgement. Adopting a beggar-thy-neighbour policy, keeping hold of cash which should be paid to suppliers for work done, will undoubtedly have negative repercussions. This is not only for the suppliers concerned but also for the employees they may not be able to pay as a result, leading to a chain of economic disruption and damage.

“Such an approach is a false economy for the company, which will invariably receive a bad reputation in the marketplace. Suppliers may uplift their prices to the customer as a result of a poor reputation. Paying suppliers late may feel like a saving, but will come at an additional cost.”

Register to watch the webinar here