UK small businesses should keep a close eye on late payment reform after Small Business Commissioner Emma Jones CBE marked her first year in post with a renewed focus on faster payments, digital tools and cash flow protection.
The update, published by the Office of the Small Business Commissioner on 30 June, says Jones’ first 12 months have centred on accelerating payment times, using digital technologies more effectively and protecting small firms from the strain caused by overdue invoices. For many SMEs, that is not a narrow policy issue. It is the difference between paying staff on time, taking on work with confidence and avoiding expensive short-term borrowing.
Late payment has long been one of the most practical financial problems facing smaller suppliers. A profitable order can still create stress if the money arrives weeks or months after the work is done. The commissioner role exists to help tackle that imbalance, particularly where smaller firms are dealing with larger customers and lack the time, leverage or admin capacity to chase payment repeatedly.
Why the one-year update matters
The useful part of the update is not just that the commissioner has completed a year in office. It is the direction of travel. The language around “landmark late payment reforms” suggests payment practice remains high on the government and business support agenda, and that firms should expect more attention on how invoices are approved, queried and settled.
For owners and finance leads, this is a prompt to tighten the basics before any new reform lands. Clear payment terms, accurate invoices, named contacts, purchase order checks and early follow-up are still the first line of defence. They also make it easier to use official routes if a customer becomes persistently slow or unresponsive.
BritishSME has previously covered how late payments are squeezing UK SMEs and what the Small Business Commissioner wants to change. The latest update reinforces the same practical point: cash flow discipline is not just bookkeeping. It is an operating risk that should be managed like stock, staffing or customer demand.
Digital tools are part of the answer, but not the whole answer
The commissioner’s update also highlights digital technology. That matters because payment delays often start before an invoice becomes overdue. Errors in invoice details, missing purchase orders, unclear approval routes and slow internal processing can all add days or weeks.
Small firms do not need to overhaul every system at once. A realistic starting point is to review where invoices get stuck. If the same customer regularly asks for a missing reference, build that into the job sign-off process. If a spreadsheet is being used to track payment dates, set reminders before the due date rather than after it passes. If a firm is moving towards accounting software or e-invoicing, make sure the team understands how to keep records consistent.
This also connects with wider tax and admin changes. Firms preparing for more digital record keeping may want to revisit BritishSME’s guide to Making Tax Digital for Income Tax, because cleaner records can help with both compliance and day-to-day cash control.
What small businesses should do now
The immediate action is to treat payment terms as part of the sale, not an awkward afterthought. Before accepting new work, confirm who receives the invoice, what reference is required, when payment is due and what happens if there is a dispute. For repeat customers, compare agreed terms with actual payment behaviour over the past few months.
Firms should also keep evidence. Contracts, emails, purchase orders, delivery confirmations and invoice copies all help if a payment problem escalates. Where a larger customer repeatedly misses agreed terms, the Small Business Commissioner can be a useful route for understanding options and raising concerns.
The one-year update is a reminder that late payment is still being treated as a serious barrier for smaller firms. That is welcome, but businesses should not wait for reform before improving their own systems. The best position is to have clean invoices, clear terms and a regular chase process already in place.
For SMEs working on thin margins, faster payment is not a nice-to-have. It is working capital, resilience and breathing space.
Source: Small Business Commissioner: Emma Jones – One Year On.
