Every year thousands of Scottish firms go to the wall because of late payments. The UK’s late payment culture sees big businesses often disrespectfully and cynically using their smaller counterparts as a free source of credit, delaying payment until the last possible moment. Many, like me, that have been around the block a few times might wrongly accept this as a fact of business life. However, if we look elsewhere in Europe, we find that other advanced nations don’t face the same late payment epidemic. It shouldn’t be controversial to suggest that maybe we can learn something from our continental cousins. Indeed, figures gathered by the Federation of Small Businesses (FSB) found that if Scotland emulated the payment practices of Norway, 2,075 fewer firms would close annually, resulting in a £134m boost to the economy. Why should firms in Stirling wait on average 17 days over contract terms, compared to just 7 for firms in Stavanger? Sweden, Germany, France and Finland too all have much healthier payment cultures than we do over here. On a UK-wide basis, we estimate that 50,000 more firms a year would survive if we made late payment a thing of the past, which would result in a £2.5 billion annual uplift to the economy. The good news is that following FSB pressure the UK government has decided to do something about it. Just last week, they announced their intentions to force large companies to publish details on how quickly they pay their suppliers. With that sort of transparency, firms will be able to make an informed decision about with whom to work. You might be able to manage your cashflow for that contract if you get paid in 30 days, but what if it was more likely to be three months? In addition boards, shareholders and media could shame those companies squeezing local firms. It’ll be important that these new regulations are enforced. Similar initiatives have failed because no one was knocking on the UK PLCs’ doors when they failed to deliver. Further, what we really want is some tech start-up to learn about this development and spot the opportunity. Wouldn’t it be great if we could simplify the due diligence process, and firms could look up a Tripadvisor for payment practices? Announcing this change UK Government Small Business Minister Margot James said: “By shining a light on how large businesses pay their smaller suppliers, we want to empower small businesses and drive a real change in payment culture.” News of this move is an early Christmas present for many firms – some may even raise a glass and say Skål (Norwegian for cheers!) to this worthy initiative. Andy Willox is FSB Scottish policy convenor This article first appeared in the Daily Record's Business Insider magazine See how FSB have campaigned on this issue Lobbying & Campaigning from FSB Find out more You may also like 14 November 2018 How role models inspire women to start up their own businesses 09 November 2018 Weekly Brief 45 - Friday 9 November 2018 01 November 2018 Vegan businesses dine out on meat-free boom 12 May 2017 Weekly Brief 19 – Friday 12 May 2017 12 July 2016 Small Business key to tackling climate change 05 February 2016 Winners of FSB Worldpay Awards announced!