The Small Business Commissioner has clawed back £3.1 million in late payments owed to small businesses by large companies within the last six months.
According to new research from Funding Options, this compares to just £380,000 repaid in the previous six months.
Government launched the Small Business Commissioner in December 2017 to help small companies resolve payment disputes with larger companies. The office has recovered £3.7 million for SMEs since it started around 15 months ago.
Late payments is seen as one of the biggest problems affecting small businesses, according to Bibby Financial Services in its latest SME confidence tracker. Huge cash flow problems can arise for a small business from just one major client not paying an invoice on time, in extreme circumstances causing insolvency.
The commissioner has been criticised for making a slow start in its mission to help recover money owed to small business. Fund Options says, however, it is now becoming more effective.
There had been concerns that small businesses would be reluctant to complain to the Small Business Commissioner about larger clients for fear of losing custom. However, the progress that the commissioner is making should encourage other small businesses to come forward, argues Funding Options.
Funding Options says that the Small Business Commissioner should be given extra budget to help even more small businesses get back the money they are owed.
Conrad Ford, CEO of Funding Options, said: “The Small Business Commissioner is finally hitting its stride. That’s shown by the number of businesses it has now helped and the money it has recovered.
“A gap in cash flow sometimes means small businesses, who rely on timely payment from clients, are forced to forego investment in the growth of the business.
“Larger companies certainly have the means to pay on time, so it’s a straightforward issue that can be avoided.”