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Late Payment

The Issue

Small businesses are owed on average £6,142 mostly by larger firms not paying them for goods and services on time. For more than 10 years we’ve been highlighting the impact of late payment, supply-chain bullying (suppliers are forced by larger firms to cut their prices), retrospective discounting (larger firms forcing a discount of an already agreed price) and paying-to-stay (smaller companies pay larger firms to remain a supplier).

Our research shows 37% have run into cash flow difficulties, 30% have been forced to use an overdraft and 20% cite a slowdown in profit growth. If all payments were made on time 50,000 more businesses could be kept open whilst the UK economy would receive a £2.5 billion boost. 

Action FSB have taken

  • In January 2017 we published a new guide for small businesses facing problems around late payment and managing cash flow.
  • In Spring 2017 we’ve been invited by the Government to be directly involved in the appointment process for the new Small Business Commissioner.
  • In November 2016 we published a report into poor payment practice and the economic impact on small suppliers.

Our Goal

Protect small businesses by lobbying the Government for stricter enforcement of the Prompt Payment Code. Signatories must pay suppliers within a maximum of 60 days, unless in exceptional circumstances.

Achievements in...



  • A new Enterprise Bill was announced in the 2015 Queen’s Speech. It includes plans for a Small Business Conciliation Service to address the issue of late payment.
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  • In 2015 the Scottish Government launched the ‘Business Pledge’, a voluntary scheme to encourage businesses to adopt good practice.

  • We pressured the government to include a pledge on prompt payment to help get Scottish small businesses paid on time by their big customers.

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