Potential Changes to Small Business Debt Collection

Published 754 days ago
Potential Changes to Small Business Debt Collection

A country is built on the backs of hard working individuals. Most of these hard working individuals are small business owners. Large companies tend to forget the fact that they were once known as small business and tend to take advantage of small businesses by not paying them for the work they have done. If they do pay it is usually very late and they may refuse to pay late fees. It is estimated that £26bn in unpaid bills exists in the UK from large companies simply refusing to pay their bills.

Why Not Pay The Bill?

One would think that a large company that is bolstered by wild success would want to encourage smaller businesses to succeed by paying their bills. These expenses are often a mere fraction of what the overall earnings of the company are so paying the bill will definitely not affect the profit of the much larger company. However it is the practice of many companies to refuse to pay the bill even though services were rendered because it is understood that many small companies do not possess the funds available to push for any form of legal ramifications, so it is in the best interest of the larger company to pay late or simply not at all. Small businesses are forced to bend over backwards in order to get their money or even take the loss due to bullying larger companies.

Where to Turn?

Small business owners have had virtually no place to turn for help with this growing problem. However one person is Anna Soulby. She is the new Small Business Commissioner and she working to reduce the annual lost income facing small businesses nationwide.

In 2014 a study by the Federation of Small businesses proved that of the 200.000 members of the group over 51% reported having to fight for their payments and charging late payments during the past 12 months. Over half of all these small businesses experiencing late payment issues prove that the larger businesses are taking advantage small business at an alarming rate. Anna Soulby is on a mission to reduce and eliminate this number for good.

What Regulations are Being Proposed?

An open discussion was published in July 2015 to shed light on the Government’s role in protecting small businesses. The findings were finalized in August and included views from stakeholders who were very supportive of the proposed terms.

Resolve Disputes – The new terms would allow for small businesses to have a place to turn to in order dissolve disputes without resulting to expensive court costs and loss of both time and money. A small company that is forced into a legal battle with a larger company can be positively buried by legal fees and very often cannot recover from the legal battle.
Independent Advice Board – Many times it can be difficult to obtain credible information or advice for a small business looking to resolve disputes. The new regulations would set up an area with the sole purpose of providing small businesses with the advice they need in order to proceed in the correct manner.

Consideration of Complaints – With the current situation there is no consideration for smaller businesses looking to resolve disputes with larger companies. This new entity would consider these complaints on an individual basis to give the smaller companies a chance to reclaim their losses.

Opposition
As with any new proposal there is always opposition. In this case the opposition comes in the form of government entities refusing to acknowledge the current problem claiming insufficient evidence. Apart from what these government entities are perpetuating, the evidence speaks for itself. It is time for larger businesses to stop taking advantage of smaller companies in order to keep them from achieving their financial goals.

Large businesses need to be held accountable for the damage done from simply not paying their bills. There would not be an issue if the bills were not paid if services were not rendered, however small businesses are doing quality work and many times offering larger companies a great discount, but still being stiffed by the companies not paying their bills. Stepping on the little guy is how many of these businesses have gotten to where they are today and that practice needs to stop.

There is not a single business on the face of the planet that starts out with the intention of closing its doors due to unpaid bills. However this problem does exist and is growing every day. It is the responsibility of the small business owner to rise up and be heard. They have to let the government know that they are there and willing to fight for their businesses to grow.

Large corporations are simply ignoring these small businesses because they do not see the threat. Government has to stand with these small businesses to give them an outlet to resolve these disputes and show the big companies that they are not willing to simply lie down and take what they dish out, but rather are backed by the government that is supposed to support the people.

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