Late payments to small and medium businesses are estimated to cost the UK economy almost £11 billion each year. The long running problem impacts over 1.5 million SMEs and contributes to 14,000 business closures every 12 months.
In a bid to tackle the issue, the UK Government introduced a new independent body in 2016 to address unfavourable payment practices in the private sector.
What is The Office of the Small Business Commissioner (OSBC)?
The Office of the Small Business Commissioner (OSBC) was established under the Enterprise Act 2016. Its main role is to:
- support small businesses to get paid quickly and on time
- influence large businesses to improve payment times to suppliers
- work with all businesses to raise payment practice standards across the UK.
The OSBC supports small businesses across the UK by investigating formal complaints regarding late and overdue payments by larger businesses. It also provides advice and support on issues relating to overdue payments and payment practices.
Who can access support from the OSBC?
To be eligible for support from the OSBC, you must be:
- All small businesses (firms with fewer than 50 employees)
- Have a registered office or principal place of business in the UK
- Not classed as a public authority
- Seeking support for late / overdue payments from a larger business (a firm with more than 50 employees),
When is the OSBC unable to provide support?
There are instances when the OSBC is unable to help, including when:
- The complaint relates to the construction sector
- The large business has gone into administration
- The dispute is against another small business
- The complaint is against a government department or local authority
- The small business is located overseas
More information, including signposting to other available support, can be found at www.smallbusinesscommissioner.gov.uk.
New support available for help SMEs
Fair Payment Code
To help improve the speed and efficiency of payments to small businesses, the OSBC has launched a new Fair Payment Code that rewards businesses for adopting fairer and quicker payment practices. More than 400 businesses have already achieved one of the three award tiers. Small businesses are able to see which companies are signed up to the Fair Payment Code on the OSBC’s website.
Digital developments
The OSBC is exploring how digital technology solutions, like open banking data and prompt payment scoring, can make life easier for small businesses. It is also working with partners including the Centre for Finance, Innovation and Technology to drive forward new systems, processes and ways of working that will accelerate payments.
Content and initiatives
Further investments are being made to develop guides, case studies and toolkits covering topics like ‘how businesses can get paid well’ and ‘getting invoicing right.’ You can find more information on www.smallbusinesscommissioner.gov.uk.
How to contact The Office of the Small Business Commissioner (OSBC) and submit an enquiry
Enquiries can be made online at www.smallbusinesscommissioner.gov.uk.
There is no charge to use this service. Information, guidance, and the OSBC’s complaint scheme is free and available to all small businesses with fewer than 50 employees.
Accessing help and support from the North East Growth Hub to grow your business
If you’d like to access support in other areas of your business - from operations and finance to international trade and leadership - book an appointment with one of our expert Business Growth Advisers who can signpost you to business support and finance and funding solutions tailored to your individual business needs.