- From 1 April suppliers bidding for central government contracts over £5m per year, will need to pay at least 90% of their invoices to suppliers within 60 days.
- This follows news that several major brands have dropped out of the voluntary Prompt Payment Code after updated rules asked them to pay 95% of invoices within 30 days to their small suppliers and 95% of all invoices within 60 days.1
- The Federation of Small Businesses has found that a third of small firms have been impacted by poor payment practices in recent months2
- TSB has been awarded a ‘Good Business Pays’ award, for paying 96% of its SME suppliers within seven days and has partnered with BankiFi to launch the Revenu app to help small business customers receive quicker payments.
TSB, one of the leading banks to pay small and medium sized suppliers promptly, and the first to become a member of the Good Business Charter, has joined forces with the Small Business Commissioner in calling on more big businesses to pay their suppliers on time.
Small businesses across the UK are facing into a range of challenges, not least inflationary pressures, international uncertainty, and rising energy bills – the stress of being paid on time, or even within a month, by big business shouldn’t be one of them.
Small businesses are the lifeblood of Britain’s economy, employing 61% of the private sector workforce – and generating 52% of turnover.
What’s the impact on small businesses?
The Federation of Small Businesses (FSB) has warned that we’re facing the loss of 440,000 small firms this year – alongside the talent that could drive future prosperity - because of poor payment practices.
Small business owners aren’t just facing the financial impacts, but late payments are also impacting their mental health, some citing losing sleep and taking on unnecessary stress and pressure3 – taking them away from focusing on growing their business.
Paying invoices promptly is vital in providing healthy cash flow to help small businesses survive and thrive, and big business has a huge role to play in this.
TSB has played its part, providing vital cashflow to small and medium sized business suppliers, paying 96% of invoices within seven days over the last six months.
Alongside this prompt payment, TSB has written a 30-day guarantee into all supplier contracts, and in the second half of 2021, 99% of all invoices were paid by TSB within 30 days.
TSB is calling for other businesses to sign up to the Prompt Payment Code and to be transparent on the issue of paying suppliers and disclosing how long it takes them.
Providing digital solutions to speed up payments
E-invoicing is crucial to helping small businesses get paid on time, that’s why TSB partnered with BankiFi to launch Revenu; an app, exclusive to TSB that will allow small businesses to receive quicker payments and to better manage their business finances.
Revenu allows TSB’s business clients to collect customer payments from requests sent via SMS, WhatsApp, email and QR code. It significantly simplifies the invoice process by providing several flexible, accessible ways of receiving payment and accelerating access to working capital.
TSB’s Director of Customer Banking, Mark Curran, said:
“Paying business suppliers on time is critical not only to healthy cash flows and working capital but also reducing the mental burden on owners so they can focus on what matters most to grow their business.
“As TSB and other members of the Prompt Payment Code have shown – where minds are put to the task, administrative hurdles can be readily resolved.”
UK Government’s Small Business Commissioner, Liz Barclay, said:
"Now more than ever we need small suppliers to be paid quickly for the work they deliver. You wouldn’t ask your butcher to wait until Easter for payment for the Christmas turkey. Don’t use your small suppliers to finance your bigger business. If they don’t get paid quickly, they can’t manage their cashflow and may well not be around the next time you need them. And it can be very expensive in time and money to find a replacement supplier you can trust."
Supreet Thomas, Head of Communications | firstname.lastname@example.org
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Notes to editors
1 Major companies are permanently removed from the Prompt Payment Code for failing to pay their bills on time – Small Business Commissioner
2 400,000 small firms threatened by late payment as costs surge, new study finds – FSB, The Federation of Small Businesses
3 63% of small business owners suffer from stress, anxiety or depression caused by late payments – Small Business Commissioner
- TSB has been awarded the ‘Fast Payer Award’ from Good Business Pays.
- TSB is also a member of the Good Business Charter, which requires businesses to sign the government’s Prompt Payment Code requiring companies to pay small businesses within 30 days.