Xero, the global small business platform, has announced the formation of a prompt payment task force of leading experts, brought together to find new solutions to the late payment crisis which has had a stranglehold on small firms for decades.
47% of small firms cite cash flow issues and late payments as two of the biggest obstacles to their growth. Xero also found that almost three in five (59%) of big businesses actually increased their payment terms during the pandemic.
This demonstrates that decades of policy measures and attempts to reduce the issue by relying on ‘cultural change’ have not improved the situation.
In response, Xero has published the ‘Lifecycle of an Invoice’ report. It explores available academic research around late payment culture to date, and highlights key interventions in the payment journey which could significantly improve the lives of small businesses.
The prompt payment task force – in association with The Entrepreneur’s Network – will discuss the report findings and come up with practical recommendations to take to the government and key stakeholders. Experts include; Dr Veronika Koller, behavioural scientist Dr Alexandra Dobra-Kiel, accountant Kara Curtayne, psychologist Dr Audrey Tang, business journalist Simon Read, and owner of Small Business World, Zing Pritesh Mody.
Gary Turner, Managing Director of Xero commented: “Consumers can instantly pay for goods by tapping a card or a phone and yet businesses, particularly corporates who often popularise concepts like digitisation and automation, insist on outdated processes and payment terms over several months. And in spite of this, they still can’t pay promptly. This is unacceptable.”
“We’ve been talking about this problem for too long so we want to look at positive ways to move forward, whether that’s using technology or behavioural change. We’ve assembled a group of leaders in their fields to distil the thinking from around the world and plot some routes forward. We’ll be developing some tangible recommendations for change.”
Philip Salter, founder of The Entrepreneur’s Network commented: “The UK is home to some of the most innovative and ambitious entrepreneurs. Being paid late can be a huge barrier, not only to overall business success but also to their financial stability and mental wellbeing. With the technology that now exists, there should be no excuse for paying late, but the challenge remains – so it’s great to be part of this task force to explore some new solutions to the problem.”
The prompt payment task force panel will meet at a private roundtable event in September, exploring the complex reasons behind late payments. The panel’s findings will then be discussed in a virtual public event on 7 October at 3pm, with Liz Barclay, UK Small Business Commissioner, confirmed to attend.