The Government launched its Small Business Plan today with the aim of supporting SMEs across the UK and unlocking growth.
In the Plan, the Government pledges to tackle the issue of late payments, which it estimates costs the British economy £11bn a year and closes 38 businesses a day, with tough new legislation.
The Small Business Plan also unveils £4bn worth of funding, which will be used to inspire the next generation of entrepreneurs and small business owners. You can read the Government's full statement on the Plan here.
Subrahmaniam Krishnan-Harihara, Deputy Director of Research at Greater Manchester Chamber of Commerce, said: "The Government's new Small Business Plan, with its 'toughest crackdown on late payments in a generation', is a welcome and necessary move for SMEs. The proposals, including new fining powers for the Small Business Commissioner and a mandated 60-day payment term, are a crucial step towards improving cash flow and fostering business stability. The new £4bn financial support package is also a significant boost for start-ups and scale-up businesses.
"However, a crucial element for success will be the complementary role of technology. While these new proposals provide the legislative and punitive measures, modern technology offers a route to higher efficiency. The Government's broader push for digital adoption is key here. By leveraging cloud accounting platforms, e-invoicing and other automation tools, businesses can reduce the administrative burden and ensure faster payments. The ultimate impact of these new rules will therefore depend on a two-pronged approach: effective enforcement of the regulations and widespread adoption of the digital tools that make compliance easier.
"We should also see whether and how large firms adapt to these new rules and ensure compliance or adopt new tactics to navigate the regulations. The Small Business Plan is indeed crucial but it is the first step. It should not be regarded as the only lever to empower the UK's many small businesses."